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What an Inverted Yield Curve Means (And What It Doesn’t)

Neil George

By now you’ve heard plenty of talking heads on television saying all sorts of scary things about the inverted yield curve for United States Treasury bonds. And if you missed the headlines, you’ll be reading them popping up in news feeds and in the papers.

A yield curve is the plotting of bond maturities and their yields from shorter-to-longer-term. It shows how the market for any type of bond is being bought and traded. Normally, shorter-term bonds have lower yields than longer-term maturities.