The yield curve is less intuitive than the unemployment rate, but it has historically been among the best predictors of recessions.

The fundamentals are straightforward: The curve essentially shows the difference between the interest rate on short-term and long-term government bonds. When long-term interest rates fall below short-term ones, the yield curve is said to have “inverted.”

Think of the yield curve as a measure of how confident investors are in the economy. In normal times, they demand higher interest rates in return for tying up their money for longer periods. When they get nervous, they’re willing to accept lower rates in return for the unrivaled safety bonds offer. (That’s the simplified version. My colleague Matt Phillips gave a more detailed explanation last year.)