All the Talk About Charts and Yields Is Tough to Digest. an Inversion in the Yield Curve Is Considered to Be a Reliable Predictor of a Recession, Though at Times They Have Inverted Without a Recession Following.

What’s Happening Now?

At 1.75 Percent, the Three-Month Yield Is Still Well Below the 10-Year Yield of 3.48 Percent, So No Inversion There.

So the Yield Curve Just Reflects the Bond Market’s Thinking?

It Could Also Have Real Effects on the Economy. Banks, for Example, Make Money by Borrowing Money at Short-Term Rates and Lending It out at Longer-Term Rates. When That Gap Is Wide, They Make More in Profit.

Is It a Perfect Predictor?

No, an Inverted Yield Curve Has Sent False Positives Before. the Three-Month and 10-Year Yields Inverted in Late 1966, for Example, and a Recession Didn’t Hit Until the End of 1969.

Fed Chair Jerome Powell Would Say No. Earlier This Year, He Said He Pays More Attention to the First 18 Months of the Yield Curve Than What’s Going on Between the Two-Year and 10-Year Yields.

What Is the Yield Curve and How Could It Warn of the Next Recession?

Q: What Is the Yield Curve?

At the Center of the Investing World Are Treasurys, the Ious the U. S. Government Gives to Investors Who Lend It Money. the Yield Curve Is a Chart Showing How Much in Interest Different Treasurys Are Paying.

By James H. Sterling

• Oct 8, 2026 • 5 min read

What Is the Yield Curve and How Could It Warn of the Next Recession?

Direct Answer • Key Takeaway

New York (Ap) — One of the More Reliable Warning Signals for an Economic Recession Started Blinking Again.

James H. Sterling

Environmental Science & Climate Journalist

James Sterling reports on renewable energy developments, climate policy, ecological conservation, and green tech innovations around the globe.

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