An inverted yield curve is a rare financial phenomenon where short-term bonds offer higher yields than long-term bonds, typically identified by comparing the 10-year U.S. Treasury yield against 2-year or 3-month notes. The term was coined by economist Campbell Harvey in his 1986 PhD thesis, and it often occurs when the Federal Reserve raises short-term interest rates to combat inflation, signaling that investors expect future rate cuts and an economic slowdown. Historically, this inversion has been considered one of the most reliable leading indicators of a recession, often preceding one by 7 to 24 months, though skeptics joke it has predicted "nine of the past five" downturns. The longest and deepest inversion in history began in July 2022 as the Fed aggressively hiked rates to fight inflation, yet despite widespread predictions, no recession materialized, raising questions about its predictive power in a modern economy with labor shortages and low debt. This has led economists to debate whether widespread awareness of the indicator has made it less reliable, as investors now react preemptively to its signal.