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Does the Yield Curve Signal Recession?

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Experience has taught economic forecasters to expect a recession when the yield on short-term Treasury securities rises above the yield on longerterm securities—a situation known as a yield-curve inversion. But some economists suspect the yield curve might not be as reliable a predictor of output growth as it used to be.

Experience has taught economic forecasters to expect a recession when the yield on short-term Treasury securities rises above the yield on longer term securities—a situation known as a yield-curve inversion. But some economists suspect the yield curve might not be as reliable a predictor of output growth as it used to be.


Suggested citation: Haubrich, Joseph G., 2006. "Does the Yield Curve Signal Recession?" Federal Reserve Bank of Cleveland, Economic Commentary, 04.15.2006.

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