The difference between US 10-year and 2-year Treasury yields, representing the slope of the yield curve. • Positive (normal): Long rates > short rates — economic expansion expected • Near zero (flattening): Slowdown concerns emerging • Negative (inverted): Short rates > long rates — recession signal Historically, recessions follow yield curve inversions within 6–24 months. It has predicted every US recession since 1970. Importantly, the 'un-inversion' (return to normal) often occurs just before the recession starts, making the normalization itself a warning sign.