This Economic Indicator Says the S&P 500 Could Drop 20%: Here's Warren Buffett's Investing Advice
The U.S. Treasury yield curve -- a graphical plot of interest rates at different maturities -- normally slopes upward, meaning short-term bills have lower yields than long-term bonds. That happens because investors expect greater returns in compensation for committing capital for longer time periods.
However, on rare occasions, the yield curve becomes inverted and short-term rates exceed long-term rates. yield inversions between the three-month and 10-year Treasuries have reliably predicted the last 10 recessions, and that portion of the curve is currently inverted.
Read on the learn how that could affect the S 500 (SNPINDEX: ^GSPC), and check out some relevant investing advice from Warren Buffett.
Source Fool.com
