Yield curve, 10-year minus 2-year

An inverted curve has preceded every US recession since the 1960s, which is why it is quoted so often. It is worth being precise about what that does and does not mean.

The signal is the inversion, not the recovery, and the lag between the two has run from six months to two years. A curve that has just returned above zero is not an all-clear — historically it has been closer to the opposite, because the steepening usually comes from the front end falling as the Fed starts cutting into weakness.