Wall Street’s Key Recession Indicator Just Went Off

Wall Street’s Key Recession Indicator Just Went Off

The yield curve inverted on Monday amid a tumultuous several days on Wall Street — indicating that a recession may be on the horizon.

The yield curve refers to the relationship between bond maturity and expected interest rates. Normally, a bond with a more distant expiration will have a better interest rate — but with an inverted yield curve, short-term interest rates are higher than long-term ones, reflecting a looming increase in interest rates. A yield curve inversion has only failed to predict a recession one time since 1955, according to the Federal Reserve Bank of San Francisco.

The gap between the two-year and 10-year Treasury yields fell to -0.02% on Monday before rebounding to positive territory, while the gap between five-year and 30-year yields fell as

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