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Economic Brief

Dec. 6, 2018

Richmond Fed Report Addresses Recent Yield Curve Concerns

Yield curve inversions have preceded each of the past seven recessions, so the recent flattening of the yield curve has fueled speculation that another recession might be imminent. But the latest Economic Brief shows how the low term premium (compensation for holding long-term rather than short-term bonds) could mean that yield curve inversions are more likely even if the risk of recession has not increased.

The Richmond Fed’s Economic Brief series provides web-exclusive essays on current economic issues and trends. Sign up to receive an email notification when a new essay is posted.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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