What is an inverted yield curve, and what does it mean to me?

Inverted Yield Curve
 

In early August of 2019, headlines referring to the feared “inverted yield curve” were on display all over the news, financial websites, and publications, sparking a more than 2.9% decline in the S&P 500 (Source: Yahoo Finance), its worst single-day of trading for the year. The following day, a plethora of articles were published explaining an inverted yield curve and linking its direct correlation to an imminent recession, further weakening investor sentiment. In this day and age where the headlines are often times scary, many are wondering: what is an inverted yield curve and should they panic?

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