In the world of finance, few indicators carry as much weight and intrigue as the yield curve. It’s a graph that plots the interest rates of bonds with similar credit quality but different maturity dates. Among its various shapes and forms, the inverted yield curve stands out as both an enigma and a harbinger of economic shifts. In this article, we’ll look into what exactly an inverted yield curve is, using the 10-year versus 3-month Treasury yield as an example, and explore its significance for the financial markets.
