A graph showing the relationship between bond yields and their time to maturity. It typically shows yields for government bonds with different maturity dates, from short-term to long-term. The shape of the curve can indicate what investors expect about future interest rates and economic conditions.
A normal yield curve slopes upward: a 2-year Treasury bond might yield 3%, a 10-year might yield 4%, and a 30-year might yield 4.5%. This tells investors that longer-term bonds offer higher returns, which is typical when the economy is expected to grow steadily.
Greater Fool is a free Chrome extension that explains terms like this in place. Highlight a word on any page, click Explain, keep reading.
Add to Chrome (free)