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Is There a Message in the Yield Curve?

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Short-term bond yields have moved above long-term bond yields over the past year. The resulting inverted yield curve indicates that monetary policy is tighter than it could be and may be tighter than it has been, but provides no basis for judging whether policy is tight (or easy) enough.

Short-term bond yields have moved above long-term bond yields over the past year. The resulting inverted yield curve indicates that monetary policy is tighter than it could be and may be tighter than it has been, but provides no basis for judging whether policy is tight (or easy) enough.


Suggested citation: Stevens, E.J., 1989. "Is There a Message in the Yield Curve?" Federal Reserve Bank of Cleveland, Economic Commentary, 03.15.1989.

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