what an inverted yield curve means for the economy?
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An inverted yield curve is thought to be a good predictor for an upcoming recession. This makes some logical sense; it might mean that investors are trying to beef up their short-term cash reserves, which is not a good sign.
In practice, this predictive power is weak. There have been both false positives and false negatives in recent history.
Some people claim that inverted yield curves have always been followed by recessions. This is only technically true because there is no specific time frame attached to that claim. It is analogous to predicting that Joe Biden will die but not necessarily in office.
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