Yield Curve Inversion: What it is, Why it Matters
From forex.com
Imagine for a moment that you walk into your local bank, and you wanted to take out a loan. You ask for a short-term, three-month loan and the bank provides a quote of 5.3%, which sounds high. So, to get the monthly payment lower you inquire about extending the term, to two years instead of three months; and this time the bank provides a quote of 5.0%. This sounds strange, as the bank is looking for a lower rate of return for an additional year and nine months of risk. Risk and return are supposed to go hand-in-hand, and this seems to be a clear illustration of that not being the case, where the shorter-term with ...
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