We all hear about the stock market every day. The S&P 500, the Dow Jones Industrial Average.
What is the stock market? Think of it as a literary device.
So for instance: When a stock is up, people are telling positive stories about that company.
When a stock is down, people are talking smack about that company.
When it goes down, yes everyone is cranky. But we still don't know why. It could be literally anything. It's never ONE thing.
What are bonds?
They are how companies and governments borrow money.
Every bond is a contract that says "we'll pay you back with this interest on this date."
That's because selling stock is pretty casual but borrowing money requires a lot of proof and documentation.
Bond investors are SKEPTICAL.
So buying US Treasuries for only 3 months paid more than keeping them for 10 YEARS.
Ergo the INVERTED YIELD CURVE.
Well because when the yield curve is INVERTED, usually a recession follows within around two years.
That's been the case for the last 5 recessions. Inverted yield curve predicts recessions.
1) if you have questions, please read the replies first. a lot are answered there.
2) if you are a man making a patronizing comment or restating what has already been said so you can look smart: sorry, that's an instant block. make this a good conversation. ty.