   
|
|
|
|
Inverted Yield Curve
|
An inverted yield curve is one where the most long-term rate is not highest. A completely inverted yield curve has the short-term rate highest; a humped or partially inverted yield curve has some intermediate rate highest. The term inverted yield curve can mean either case. Since the 1960s the inverted yield curve has been a nearly perfect leading indicator of a forthcoming US economic slowdown. Since then, every slowdown has been preceded by an inverted yield curve. Only once has a slowdown failed to materialize after an inverted yield curve emerged. Bond traders know this, so the flat yield curve that must precede an inverted yield curve takes an importance, too. Market speculation about the potential for an inverted yield curve (read, recession) escalates as the normal yield curve flattens.
Rate this inverted yield curve definition...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: EBITDA, liquidity ratio, 401a, deferred tax, command economy, 144a, per diem, margin rate, deferred revenue, required rate of return, cancelled check, open position, stock split, ex-dividend, implied volatility, in escrow, irrevocable trust, limit order, quality assurance, risk management, 1035 exchange, Key Rate Duration, class C shares, current ratio, Zero Cost Collar, 1031 exchange, wholly-owned subsidiary, VIX, reverse mortgage, retained earnings, phantom income, option premium, minority interest, labor relations, ex-dividend date, covered put, real GDP, LIBOR, inflation, dividends payable, diluted share, debt service coverage, balance sheet, APR, equities, average price per share, FICO score, FTSE, stock market close
|
|
|
|
