In most years, we have a normal yield curve which is upward sloping because a longer term generally carries greater risk and investors demand higher yields on long term debts. But the yield curve has been inverted since July 2022 (See the current yield curve on Page 10 of the PP slides) while the U.S. economy has been humming in the past two years. What does the inverted yield historically signal about the economy? Is the signal wrong this time?

Yield Curve mentioned below:

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US Treasuries Yield Curve for Sep 29, 2023 https://www.ustreasuryyieldcurve.com Interest rate (96) 58 56 54 52 50 48 46 44 Interest Rate 9292323 TM ZY Years to Maturity 10 10 US Treasuries Yield Curve for Sep 29, 2023 https://www.ustreasuryyieldcurve.com Interest rate (96) 58 56 54 52 50 48 46 44 Interest Rate 9292323 TM ZY Years to Maturity 10 10