There are a lot of charts and graphs when it comes to finance. But few can invoke sheer terror like the yield curve.
The plots of various bond maturities and their yields can mean all is well or signal the beginnings of economic armageddon. Hyperbole aside, the yield curve is an important tool for determining economic health. And lately, it’s not exactly showing a wonderful prognosis.
It’s getting flatter and flatter each passing day.
For investors, this is pretty worrisome and could signal that the current bull run might be on its last legs and the economy is finally moving closer toward that dreaded recession. In the end, we should pay very close attention to the yield curve.
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