Does an inverted yield curve mean a recession is coming? Should you be afraid of it? Not according to this, because no one really fully understands what the curve means.
Consider the inverted yield curve as the equivalent of an economic bogeyman. It's when the natural order up-ends and short-term interest rates are higher than long-term ones.
The Treasury bond yield curve inverted December 27 for the first time in five years. That gave shudders to those who see the phenomenon as a harbinger of recession. And yet, the U.S. economy is strong, and surveys show most forecasters think it will stay that way. So what does the inverted yield curve really mean?
This kind of discussion is way out of my league, but I find it interesting nonetheless.