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Why the Yield Curve Inverts Before Every Recession

Beginner Investing • 6 min

Normally, lending money for 10 years pays a higher interest rate than lending it for 2 years — you're taking more risk locking your money up longer, so you demand more compensation. When that relationship flips — when short-term bonds pay MORE than long-term bonds — it's called a yield curve inversion, and it's one of the most historically reliable recession warnings that exists.The 10-year minus 2-year Treasury…

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