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Glossary · Economy

Yield curve

The line connecting Treasury yields from short (3 months) to long (30 years) maturities.

Why it matters

Normally long rates are higher. When short rates rise above long ones the curve is inverted, which has come before every US recession since the 1970s.

How to read it

Watch the 10-year minus 2-year and 10-year minus 3-month spreads. Below zero is inverted.

Also called: inversion

Related

FOMC (the Fed’s rate meeting)The Federal Open Market Committee: the Fed group that sets the target for short-term interest rates, eight times a year.Sahm ruleA recession signal: the 3-month average unemployment rate rising 0.5 points above its low of the past year.

In the Cluenex app, this explanation opens next to every yield curve figure, with the live reading for the stock you are looking at. Open it in Cluenex