The Inverted Yield Curve

InvestorGeeks had a nice article on why the yield curve is inverted (meaning the yield on short-term bonds is higher than the yield on long-term bonds, for example the yield on the 2-year bond is 4.37% while the yield on the 10-year bond is 4.35%).

Ok, so our yield curve is inverted because long-term rates have been dropping (or in reality lagging behind short-term rates as the Fed hikes interest rates) “to reflect moderating inflation worries�. We’d only have to worry if the inversion was due to short-term rates increasing

Tags: Economics

Updated at: 6 January 2006 12:01 PM

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