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Does the Yield Curve Signal Recession?

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.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.

Suggested Citation

Haubrich, Joseph G. 2006. “Does the Yield Curve Signal Recession?” Federal Reserve Bank of Cleveland, Economic Commentary 4/15/2006.