I'm still a learner in this field. Yield curve is meant to be a leading indicator. Here is a summary of what I understood. Yield curve is usually upslope in good times. Shorter term yield having lower yield than longer term. Reason being longer term bond has more risk so investor tend to expect a higher rate.
At times when the economic cycle starts to reverse, the yield starts to flatten. With investors buying more of longer term bond to lock in the higher yield (expecting it to drop in future) hence driving down the yield. As investors expect bad economy looming which will result in lower yield, there will be less demand for short term bond, hence the rise in its yield.
Up to a point when the yield curve inverts, then a recession is imminent or just around the corner.
Just my thoughts, I'll made this into a post when I have more data to backtest.
This Chart Could Be a Bad Omen for Markets
The forward curve of a proxy for the Fed's policy rate has slightly inverted.