I just spoke with Arturo Estrella, the now-retired professor of economics at Rensselaer Polytechnic Institute and former New York Federal Reserve economist who is best-known for his study of the predictive power of the yield curve.
Once again, he said that the curve he and his colleagues studied while at the Fed involved the relationship between the rates on the 10-year Treasury note and the 3-month Treasury bill. When those rates move closer to each other, the curve is said to be flattening, and when the shorter-term Treasury has a higher rate than the 10-year, the curve is said to be inverted.
Lately a lot of people have focused on the difference between the rates on the 10-year and 2-year Treasurys, which in Estrella's view is the wrong curve to be watching.