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Inverted yield curve

When short-term bond yields are higher than long-term yields.

Macro & RatesIntermediate

Definition

An inversion, often measured as the 2-year yield above the 10-year yield, shows markets expect rates to fall later, commonly because of slowing growth. Historically it has often come before recessions, but the delay has varied widely.

Watch out for

It is one indicator among many. The timing of what follows is unreliable.

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