"Interest rate inversion" refers to the phenomenon that long-term interest rate is lower than short-term interest rate. Under normal circumstances, the longer the bond term, the higher the yield; The shorter the term, the lower the yield. It's like saving money in a bank. The yield of 10 time deposit is higher than that of 2-year time deposit, but now the interest rate of 10 time deposit is lower than that of 2-year time deposit.

The inversion of national debt interest rate also refers to the phenomenon that the long-term interest rate is lower than the short-term interest rate. For example, when the ten-year bond interest rate in the United States is lower than the three-year interest rate, it is also called the national debt interest rate inversion. In the past 40 years, the US 10 one-year interest rate curve and 2-year interest rate curve have been upside down four times, accompanied by five economic recessions.

Reasons for hanging upside down:

Interest rate inversion usually reflects people's pessimistic expectations for the future. The Fed usually affects short-term interest rates. When people expect that the economy will deteriorate and the Fed will not raise interest rates or even cut interest rates in the future, then the short-term interest rate will fall and the reinvestment risk of short-term investment will be greater. At this time, in order to lock in the income, people buy long-term treasury bonds one after another, which makes the price of long-term treasury bonds rise and the yield drop, resulting in the phenomenon that the long-term interest rate is lower than the short-term interest rate. /a08b 87d 6277 f 9 e 2 fa 8d 57 e 9 b 0d 30 e 924 b 999 f 345？ x-BCE-process = image % 2f resize % 2Cm _ lfit % 2Cw _ 600% 2Ch _ 800% 2c limit _ 1% 2f quality % 2Cq _ 85% 2f format % 2Cf _ auto