The Yield Curve and Predicting Recessions

Source: Congressional Research Service, CRS Insight, IN11098, April 11, 2019

Economists and financial markets closely monitor interest rates in hopes of gleaning information about the path of the economy. One measure of particular interest is the “yield curve.” Recently, the yield curve associated with U.S. Treasuries inverted. This Insight discusses possible explanations for the inversion, including whether the inversion is signaling that the economy will enter a recession.