SDOW - When A Yield Curve Inversion Means Recession

Interpreting the Yield Curve

Generally speaking, the yield curve refers to varying yields on U.S. treasury bills, notes and bonds. It can be used in describing other fixed-income securities, but for the purposes of this article, we will focus on treasury securities. Before we get into why the yield curve inverts and what that means, I thought it would be helpful to understand what drives the shape of the yield curve. In one word: risk. But it may not be actual risk as much as perceived risk (or expectations) that determines the shape and steepness

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