Yield curve

Yields of different maturities joined into one line

In detail

The yield curve plots the yields of bonds with different remaining terms. Normally longer terms yield more, so the line slopes up. When short yields sit above long ones the curve is inverted, which is read as the market expecting a weaker economy. The central bank's policy rate moves the left end of the line.

Example

A 2-year yielding 1.5% while the 10-year yields 1.0% is an inverted curve.

Related terms

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