An Inverted Yield Curve - What, Why, and ?

On Friday March 22 2019, an economic indicator caught investors’ attention. The yield on the 10-year treasury note fell below the yield on the 3-month treasury bill. This rattled the stock market. Before getting caught in the paranoia, let us look at what a yield curve is, how it behaves, what happened that raised concerns, and what it might mean for financial markets. And last but not least, what it means for us investors. What is the yield curve? The yield curve is nothing but a plot of the yields on all treasuries maturing from 1-month bills to 30-year bonds. Normally, the yield curve is an upward slope. An investor holding a bond with longer maturity is taking more risk and hence expects

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