The most important thing for markets and the most important and largest market that effectively controls the movement of markets and liquidity is the US bond market.

How to read and understand the impact of bond movements on the economy and markets.

In short, it is important to follow the (Yield Curve)

There are three well-known definitions for reading the yield curve.

1- Normal Yield Curve

Normal Yield Curve

2- Inverted Yield Curve

Inverted Yield Curve

3- Flat Yield Curve

Flat Yield Curve

How to read

1- Normal Curve (Ascending)

Yields rise as the maturity period increases.

This means investors expect normal economic growth and moderate inflation.

Example:

2-Year Bonds = %2

10-Year Bonds = %3

30-Year Bonds = %4

2- Flat Curve (Flat)

Yields are close across all maturities.

Indicates economic slowdown or uncertainty.

3- Inverted Curve (Inverted)

The yield on short-term bonds is higher than the yield on long-term bonds.

This situation is rare and dangerous, and often precedes an economic recession.

Example:

2-Year Bonds = %5

10-Year Bonds = %4

30-Year Bonds = %3.5

Important Note

The US bond market is larger than the US stock market in terms of total value.

Government bonds are considered a safe haven and are used as an indicator of confidence in the economy and monetary policies.

The bond market and bond movements are closely monitored by the Federal Reserve, banks, governments, and sovereign funds around the world.