The yield curve is a graphical representation of interest rates for bonds of varying maturities at a specific point in time. Commonly associated with U.S. Treasury securities, the yield curve plots short-term, intermediate, and long-term interest rates. Its shape provides critical insights into market expectations for economic growth, inflation, and the potential for a recession. Over the past four decades, shifts in the yield curve have served as a leading indicator of economic activity, prompting economists to analyze its patterns closely. The Anatomy of the Yield Curve There are three main types of yield curve shapes: Normal Yield Curve: In a healthy, growing economy, the curve slopes upward, reflecting higher yields for long-term bonds compared to short-term bonds. Investors demand a risk premium for holding long-term securities. Inverted Yield Curve: When short-term yields exceed long-term yields, the curve slopes downward. Historically, this has been a reliable predictor (although not guaranteed) of economic recession. Flat Yield Curve: A flat or nearly flat yield curve indicates uncertainty, often signaling a transition period in the economy. What the Yield Curve Reveals About Economic Indicators Economic Growth A steep