Three Shapes of the Yield Curve

Positive Slope: Short term bonds have lower yields than long term bonds. Because a longer borrowing time frame entails greater uncertainly, a positively sloped yield curve is considered "normal."

Flat: Yields across the spectrum, primarily from two year to thirty year are all about the same.

Inverted (negative slope): Longer term bonds have lower yields than short term bonds. This scenario is associated with anticipation of dropping interest rates in expectation of a recession.