Plotting a Recession: The Yield Curve as a Harbinger of Things to Come

Market Insights: Institutional Issuers & Investors

Economists have recently expressed concerns about the Federal Reserve’s continual increase of short-term interest rates. Why? Because persistent rising rates can result in the flattening of the yield curve and, eventually, its inversion—a happening that has historically served as an unsettling precursor. In this article, we look at today’s yield curve and see how it shapes up against short- and long-term yields during U.S. recessions in the past 60 years.