http://www.sfgate.com/business/artic...s-12471820.php
One new item on the agenda at the December meeting: Concern about a technical indicator called the yield curve, which compares interest rates on different kinds of borrowing by the federal government, which range from one-week loans to 30-year loans.
In general, investors demand higher interest rates on longer-term loans, but the difference between short-term rates and long-term rates has been compressing.
When short-term rates exceed long-term rates, the yield curve is said to be “inverted.” Historically, that often happens before a recession.
Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, voted against raising the Fed’s benchmark rate at the December meeting. He said in a statement that the flattening of the yield curve indicated that the Fed was moving too quickly.
“In response to our rate hikes, the yield curve has flattened significantly, potentially signaling an increasing risk of a recession,” Kashkari said.
The minutes said that most Fed officials did not share Kashkari’s concerns, judging instead “that the current degree of flatness of the yield curve was not unusual by historical standards.”