Inverted yield curve

A curve where short-dated bonds yield more than long-dated ones, which is the market pricing rate cuts ahead.

A ten-year at 6.4% against a two-year at 6.9% is inverted by 50 basis points.

In the United States, inversion has preceded every recession of the last several decades, with a lag typically measured in quarters rather than months and with at least one false signal. That record is why the indicator gets the attention it does.

The Indian record is shorter and the curve is shaped by regulatory demand for government bonds, so the same reading does not carry the same meaning.

Do not import a signal across markets without checking it locally.