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)