The inverted yield curve

From bruegel.org

The yield curve plots the yields of government bonds for different maturities. Market analysts often use it to understand future growth expectations and predict recessions. A regular yield curve will be upward-sloping, as the yield on longer-maturity bonds will be higher to compensate for the risk. This is no longer the case for the United States, where the yield for the 10-year Treasury Notes first became lower than the 3-month T-Bill yield this March, staying so since the end of May (Figure 1). Is the yield inversion a red flag for future growth? We review the latest economists’ views. Matt Phillips and Stephen ... (full story)