The Effect of the Yield Curve Inversion of the U.S. Treasury Bills on Performance of the U.S. Bank Holding Companies

This research explores the significance of the yield curve inversion of federal bond prices as a key indicator of the potential drop of the efficiency of bank holding companies. This topic has been among the most arguable among economists for decades already, but most of existing scholarly papers review the issue only in one respect and without final results of implementation of the latest regulatory measure. The purpose of the study is to take into account historic data and build regression model to evaluate the effect of the yield curve inversion on the banks’ performance from different perspectives. To achieve the determined goal, we took the historic data of key bank performance indicators as well as the level of yield curve inversion for 20 years and built analytic framework that includes regression modelling, and clusterization to cover all major analytic aspects, conduct comprehensive analysis, and give economic interpretation of final results.