The yield curve: what its shape tells you
The yield curve shows US Treasury yields across maturities from three months to thirty years. Normally long yields sit above short ones because investors demand compensation for locking money away. When the curve inverts and short yields exceed long ones, the market is pricing a slowdown and future rate cuts — historically a pre-recession signal.
For a trader the curve is background direction, not a timing tool. Rising yields usually support the dollar and pressure gold and high-growth equities; falling yields do the opposite. Watch the direction of change, not the level alone.
