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Finance
Yield Curve
A graph that shows the relationship between bond yields and their time to maturity.
The yield curve is one of the most watched economic indicators. It reflects expectations about inflation, growth, and central bank policy. Steep curves suggest strong growth; flat or inverted curves suggest caution.
It's a picture of what the market thinks interest rates will do in the future — from short-term to long-term.
Real world: A normal yield curve slopes upward — longer-term bonds pay higher yields. An inverted yield curve (short-term yields higher than long-term) has correctly predicted many recessions.
💡 The yield curve is the bond market's crystal ball for the economy.