Could yield curves become inverted?

We look at yield curves in the United States and Germany : could they become inverted once the monetary policy normalisation is completed? The following factors currently point to a yield curve inversion in the future : The strong demand for risk-free bonds, given the persistently high level of risk aversion; The low term premium, due to the low variability of long-term interest rates and of inflation; The fact that expected long-term inflation is lower than short-term inflation. In the United States, financial markets expect a flat or slightly inverted yield curve; in the euro zone, by contrast, they expect the yield curve to keep a positive slope, which may therefore be an expectation error.