inverted yield curve

 This is not a new term although it may be new to most of us. Indeed, the whole reason for the media hype about it now is that it has always been an indicator of a recession to come. It is interesting the bits of finance jargon that have risen to the surface in times of trouble. We learnt about the J-curve and the dead-cat bounce in similar circumstances.

 The yield curve is a graph of interest accrued from bonds which normally goes up because, normally, we earn more from government or corporate bonds if we invest in them over a longer time frame.  You buy a bond for one year at a fairly low interest rate, but buying one for ten years gives you a much higher rate. So the graph of this is a rising curve.

 But we are in economic circumstances now where the ten-year bond offers less than the one-year bond. Thus the graph shows an inverted yield curve, high at one year and dropping to a low at ten.