No topic has dominated the investment conversation lately as much as the yield curve.
While it’s an arcane matter to most folks, we in the financial sphere have been thrown into a tizzy by this indicator of the economy’s future health—the graph of interest yields on bonds of increasing maturities, usually risk-free Treasury securities.
But some folks might be swinging at the wrong curve.
Typically, investors demand a higher yield for committing their money for a longer period, so the graph’s line rises from lower left to upper right, a positive slope in mathematical terms.
At times, such as now, yields at the shorter end of the market exceed those at the longer, creating an inverted yield curve. The most widely watched version of the curve focuses on the two-year Treasury note. At 2.44% midday Friday, its yield topped the benchmark 10-year note’s 2.38%. That reflects a…
