inverted yield curve
- See yield curve slope. American Banker Glossary————When short-term interest rates are higher than long-term rates. Antithesis of positive yield curve. Bloomberg Financial Dictionary
* * *A chart pattern that shows yields on short-term securities above those on long-term securities. This is a reversal of a normal yield curve, where long-term rates are higher to reflect the risk of holding securities for a longer time. An inverted yield curve may reflect fears of a glut of short-term paper, which pushes down prices and pushes up yields, or of a shortage of long-term securities, which pushes up prices and pushes down yields. It may also reflect expectations that inflation will be lower in the long term than in the short term, producing an eventual drop in yields. An inverted yield curve is also known as a negative yield curve.
Financial and business terms. 2012.
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Inverted Yield Curve — An interest rate environment in which long term debt instruments have a lower yield than short term debt instruments of the same credit quality. This type of yield curve is the rarest of the three main curve types and is considered to be a… … Investment dictionary
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