More on Interest Rates
Using the Yield Curve to Estimate Interest Rates in the Future
Relationship to the Business Cycle
Through assessing the slope of a yield curve on debt instruments such as governmental treasury bonds, investors can estimate the overall health of the economy in the future (i.e. inflation, interest rates, recessions, growth). Inverted yield curves are typically predictors of recession, while positively sloped yield curves indicate inflationary growth.