We have been hearing about the inverted yield curve and how it signifies that recession is on the horizon. SO what exactly is an inverted yield curve? Source: Investipedia From the chart above, short term yield is represented by the blue line (US 3-Yr Treasury Note) and long term yield is represented by the orange line (US 5-Yr Treasury Note). We can also substitute the 5-Yr note with say a 10-Yr note. As we can see, the orange line (yield) logically should stay above the blue line, since the note / bond holders are expecting higher compensation for the longer time and uncertainty of holding a long term note / bond. The point of inversion is when the orange line falls below the blue line. Why would this happen? As you know I am not good at explaining technical stuff, so I shall leave the explaining to Investopedia...