inverted yield curve


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Related to inverted yield curve: Normal Yield Curve, Flat Yield Curve

Inverted yield curve

When short-term interest rates are higher than long-term rates. Antithesis of positive yield curve.

Inverted Yield Curve

A yield curve in which the long-term yields on bonds are lower than short-term yields. A normal yield curve trends upward because bondholders expect a larger interest rate for a longer investment; however, if a yield curve turns negative, it indicates that the market believes that demand for long-term debt securities is increasing or will increase, which will drive yields downward. Higher demand for bonds usually occurs when investors believe that stock prices will fall. As a result, an inverted yield curve is a highly bearish indicator and indeed is seen as a predictor of a coming recession. An inverted yield curve is the rarest yield curve. It is also called a negative yield curve.

inverted yield curve

References in periodicals archive ?
We are just not seeing the inverted yield curve that would give us any cause for alarm.
Reflecting the inverted yield curve and a reduction in the net interest margin, the bank's net interest income for the three months ended Dec.
The recession starting in January 1980 was heralded by an inverted yield curve a year earlier, in January of 1979, and short rates exceeded long rates by almost a full point by September of 1979.
In the US, sales rose by an underlying 21 per cent to pounds 180 million, boosted by variable annuities, as the inverted yield curve continued to weigh on fixed annuity sales.
North said that the three factors - high oil prices, the inverted yield curve of 2006-2007, and the burst housing market bubble - have converged on the U.
North said that the three factors -- high oil prices, the inverted yield curve of 2006-2007, and the burst housing market bubble -- have converged on the U.
This is known as an inverted yield curve and whilst we've had an inverted yield curve for some time, this degree of inversion is the greatest for a considerable period," Ray Boulger, senior technical manager at independent mortgage broker John Charcol, said.
The very short duration of UMBF's assets made it particularly vulnerable during the protracted period of low interest rates and a flat to inverted yield curve.
2 Million of non-performing loans, continued pressure on net interest margins from the inverted yield curve, and increased salary and other organizational expenses related to the additional loan staff added to expand operations into Hillsborough County, Florida.
Britain's inverted yield curve also provides rich pickings for central banks which typically buy bonds with maturities of less than five years.
Gerald Bazewicz reported, "While we are pleased with our financial results in the first half of 2007, expenses related to the name change of our Bank and the continued presence of a flat or inverted yield curve has adversely affected net income.
Slowing growth and the inverted yield curve are keeping the risk of recession near 35%.