A Reliable Warning Sign Points to an Approaching US Economic Downturn After a prolonged period of inversion, the US Treasury yield curve is normalizing to its classic upward slope. This transition has historically preceded nearly every recession on record, making it one of the most reliable economic indicators available to market observers. For those unfamiliar with yield curves, when short-term bonds yield more than long-term ones, it creates an "inverted" curve, suggesting market pessimism about long-term economic prospects. The current normalization process, where long-term yields are again rising above short-term ones, typically signals the final phase before economic contraction begins. Financial markets are now carefully monitoring this development alongside other leading indicators.