Yield Curve

A graph showing bond yields at different maturities, used to gauge economic expectations.

The yield curve plots interest rates for bonds of equal credit quality across different maturities. A normal upward-sloping curve means longer-term bonds pay more. An inverted yield curve, where short-term yields exceed long-term, has historically preceded recessions.

Investors grew nervous when the yield curve inverted, a pattern that has often preceded recessions.