Gazing at the shape of the yield curve offers no promises on divining the future, but investors are nonetheless well advised to monitor the evolving relationship among the interest rates tied to the various Treasury maturities. On that score, the pressing question on this Columbus Day is whether a flattening yield curve will give way to an inverted one, a state of affairs in which short rates exceed long rates. Indeed, the 10-year Treasury, as we write, claims only an 18-basis-point premium over its two-year counterpart, according to Bloomberg. If and when the 10-year’s slim edge dips below that of the two-year’s yield, would such an unnatural state of pricing money signal trouble for the economy? In fact, each of the last six recessions have been preceded by such an inversion, advises a freshly minted primer on the curves of yield, courtesy of Arturo Estrella, an economist at the New York Federal Reserve Bank. “The Yield Curve as a Leading Indicator” reviews the obvious questions, and then some on the subject at hand. This tidy bit of research and summary, delivered in a user-friendly question-and-answer format, also offers a healthy bibliography for those inclined to dig deeper. No, the piece won’t extend absolute clarity about the morrow, but it sheds light on the relevance of yield curves as a forecasting tool. A fresh look at the topic couldn’t come at a more timely moment, and so CS today adds the paper to the Research Room.