RECESSION CLOCK STARTED

7 dic 2018

An inverted yield curve means a market situation in which the yields offered, for longer maturities, are lower than the yields of the short-term portion of the curve (in this case the "short" is usually considered as the rates up to 2 years). This is a situation that is at first sight counter-intuitive. Those who have studied Finance will certainly remember the mantra for which 1 euro today is better than 1 euro tomorrow; an inverted curve, instead, says exactly the opposite: better 1 euro tomorrow. This means that investors, on average, are moving towards long-term investments, despite lower yields than short-term investments.