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5 Things Investors Need To Know About An Inverted Yield Curve

The main measure of the yield curve briefly inverted Wednesday— with the yield on the 10-year Treasury note falling below the yield on the 2-year note — and rattled stocks and other markets by underlining investor worries over a potential recession.

But while inversions are seen as a reliable recession indicator, investors may be pushing the panic button prematurely. Here’s a look at what happened and what it might mean for financial markets.

What’s the yield curve?

The yield curve is a line plotting out yields across maturities. Typically, it slopes upward, with investors demanding more compensation to hold a note or bond for a longer period given the risk of inflation and other uncertainties.

[Read full article @ MarketWatch.com]

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