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When short-term bonds yield more than long-term ones — an unusual signal.
Why It Matters
Normally longer loans pay more than shorter ones. An inverted yield curve flips that — short-term Treasuries yield more than long-term ones. It draws attention because, historically, an inversion (such as the 2-year yielding more than the 10-year) has often appeared before recessions. It is a watched signal, not a guarantee or a forecast.
Key Points
- Most-cited version: the 2-year Treasury yielding more than the 10-year
- Historically has often preceded recessions, but timing varies widely
- A signal investors watch — not a prediction or a trading cue
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The Yield Curve Explained
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Related Terms
Common Questions
When short-term bonds yield more than long-term ones — an unusual signal. Normally longer loans pay more than shorter ones. An inverted yield curve flips that — short-term Treasuries yield more than long-term ones.
Normally longer loans pay more than shorter ones. An inverted yield curve flips that — short-term Treasuries yield more than long-term ones. It draws attention because, historically, an inversion (such as the 2-year yielding more than the 10-year) has often appeared before recessions. It is a watched signal, not a guarantee or a forecast.
Most-cited version: the 2-year Treasury yielding more than the 10-year
Historically has often preceded recessions, but timing varies widely
A signal investors watch — not a prediction or a trading cue