SIE practice questionmediumEconomic Indicators - Yield Curves
If the yield curve inverts, what is this commonly interpreted to mean?
- AA strong expansion is likely
- BA possible upcoming recession✓ Correct answer
- CHigh inflation is imminent
- DMonetary policy is easing
Explanation
Why B — A possible upcoming recession
An inverted yield curve often predicts recession, not expansion, high inflation, or easing policy.
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