The yield curve is a curve that traces yields on securities with varying maturities. The slope of the yield curve is an indication of the stance of monetary policy. Under normal conditions, interest rates for long term rates are likely to be higher than short-term rates, resulting in an upward sloping yield curve. An inverted yield curve occurs when short-term interest rates rise above long-term rates, usually due to the central bank raising short-term interest rates to prevent the economy from overheating