The Yield Curve > Home
Ifyou were to potthe diferent bond matures and elds on * Slasany
2 oraoh you would get whats commen refered ta 25 2
veld cure”. The shape ofthis curve says a let about the
economy ~ where tis and where t's headed,
Gontte upstart slope: Under “normal crcumstances” the ourve
villslope upware, cause lonacerm bands wil pay higher
Vols than shorertarm anes. This reflec investor ceridence
that the economy will continue ta grow ata “normal ate, and
that the usual spread of 3 perent between longterm and
short-term bond rates wil hold steady
{treat aa ae Sg
‘Steeper than usual: Tis typically ndeates the begining of an
ecanomicboam. Long-term investors seek rates higher than
the normal 3 percent spread over short-term rates, because
‘they belay rates will o up considerably inthe near tm,
Investors in short-term bonds wil beable t invest atte
higher rates, and longterm bendholders want the same
possi.
Us reomiy ld Came Stacy: Septem 1992
Flat: A fla cure, or one that i ight raised inthe mide,
pooeapeneanioapeteentie a. /eemystbeneterr