Why does an inverted yield curve serve as a predictor of a recession?.

2 answers:

3 0

An inverted curve reflects the bond market's expectation for the Fed to cut rates down the line. The Fed normally cuts rates in response to an economic downturn, hence why an inverted curve could be a recession signal.

andre [41]2 years ago

3 0

Answer:The Fed normally cuts rates in response to an economic downturn

The Treasury yield curve normally slopes upward. An inverted curve reflects the bond market's expectation for the Fed to cut rates down the line. The Fed normally cuts rates in response to an economic downturn, hence why an inverted curve could be a recession signal.

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