how can investors use the yield curve 
investors can use the yield curve to make predictions about the economy that will affect their investment decisions an investor might move their money into defensive assets that traditionally do well during a recession if the bond yield curve indicates an economic slowdown they might avoid long term bonds with a yield that will erode against increased prices if the yield curve becomes steep suggesting future inflation the bottom lineyield curves come in three main shapes a normal upward sloping curve an inverted downward sloping curve and a flat curve the slope of the yield curve predicts interest rate changes and economic activity investors can use the yield curve to make investment decisions that factor in the likely direction of the economy in the near future 