Inverted yield curves are observed when

Question

Quizplus · Accepted Answer

Inverted yield curves are often seen as a warning sign of an upcoming recession. It occurs when short-term interest rates are higher than long-term interest rates, indicating that investors are more confident in the short-term economic outlook than the long-term outlook. This can be caused by various factors, including central bank policies, market expectations, and overall economic conditions. Therefore, option C, the economy is in recession, is the best answer.

Inverted Yield Curves Are Observed When