Yield Curve Slope

What it means

• The difference between the 10-year and 2-year Treasury yields.
• Normally this is positive, since lending money for longer usually pays more. When it turns negative — called an 'inverted' yield curve — it means investors are willing to accept a lower return on a 10-year bond than a 2-year one, which only makes sense if they expect interest rates to fall.
• An inverted yield curve has preceded every U.S. recession of the past 50 years, typically by 6–18 months. It's not a guarantee, but it's one of the most-watched recession warning signs.