Why the Inverted Yield Curve Predicts Recessions; Best Way to Invest During the Inversion

What is the yield curve and why does the yield curve become inverted?
Why does the inverted yield curve predict recessions?
How to invest for maximum gains when the yield curve is inverted.

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Links
Federal Reserve Bank of St. Louis, 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity [T10Y2YM], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/T1..., February 15, 2023.
Information in the Yield Curve about Future Recessions | San Francisco Fed
https://www.frbsf.org/economic-resear...

Topics Covered
What This Video Will Show
Yield Curve is a Graph of Yield vs Term
Term Structure of Interest Rates
Normal Yield Curve: Yield Increases with Term
Yield curves differ in shape and shift differently.
Common theories about what causes the structure of the yield curve?
Bond Prices and Yields Are Inversely Proportional
Bond Terms and Duration
Bond Price / Yield
The yield curve inverts when the Federal Reserve increases interest rates.
Inverted Yield Curve
Some Yield Spreads Are More Predictive of Recessions
Graph of Different Yield Spreads and Their Predictability of Recessions.
Yield Curve from 1976 to 2022
The Federal Reserve is the primary influencer of interest rates.
The true cause of the inverted yield curve is rising interest rates.
Investors know this pattern, so they invest accordingly.
The yield curve inverts when the Federal Reserve increases interest rates.
Federal Funds Rate and the Yield Curve
Yield Curve of US Treasuries in February 2023
Why the inverted yield curve predicts recessions.
The lag in changes to economic policy to changes to the economy make a soft landing difficult.
The economy enters a recession because it has slowed too much.
How to Invest According to the Yield Curve
Buy stocks when the yield curve is normal.
How to invest when the yield curve is inverted.
Examples of Potential Capital Gains
Comparing Vanguard Treasury ETFs
Price of VGLT vs Federal Funds Rate