Inverting yield curves

What Is a Yield Curve?

A yield curve is a line that plots yields (interest rates) of bonds of the same credit quality but differing maturities.

The most closely watched yield curve is that for U.S. Treasury debt.

Usually, the yield curve slopes upward, reflecting the fact that holders of longer-term debt have taken on more risk.

Analysts often distill yield curve signals to a spread between two maturities. This simplifies the task of interpreting a yield curve in which an inversion exists between…