Why would an inverted yield curve be problem for economy

Reference no: EM13237048

When the interest rate on short-term government securities is higher than the interest rate on long-term government securities, we refer to the yield curve (i.e. the relationship between the return on different bonds) as being inverted and economists generally feel that a recession is imminent. Why would an inverted yield curve be a problem for the economy?

Reference no: EM13237048

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