What is a 'Yield Curve'?

A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates.

Sharper Insight. Smarter Investing. Manage Preferences TERM OF THE DAY Yield Curve A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates, and it is also used to predict changes in economic output and growth. Breaking it Down: The shape of the yield curve gives an idea of future interest rate changes and... Read More Related to "Yield Curve" Bond Yield Curve Holds Predictive Powers This measure can shed light on future economic activity, inflation levels and interest rates. Read More How can I create a yield curve in Excel? Find out more about the yield curve, what the yield curve is, and how to create the yield curve for U.S. Treasury bonds using Microsoft Excel. Read More The Impact of an Inverted Yield Curve Understand how the relationship between short- and long-term interest rates contributes to an inverted yield curve – a noteworthy economic event. Read More Related Definitions Curve Steepener Trade Curve steepener trade is a strategy that uses derivatives to benefit from escalating yield differences that occur as a result of increases in the yield curve between two Treasury bonds of different maturities. Read More Matrix Trading A fixed-income trading strategy that looks for discrepancies in the yield curve, which an investor can capitalize upon by instituting a bond swap. Read More Yield Elbow The point on the yield curve indicating the year in which the economy's highest interest rates occur. Read More Nominal Yield Spread The spread, expressed in percent or basis points, that when added to the yield at one point on the Treasury yield curve equals the discount factor that will make a security's cash flows equal to its current market price. Read More You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe  |  Manage Subscriptions Investopedia, LLC, A Division of IAC. 114 West 41st St, floor 8, New York NY 10036 Copyright © 2018, Investopedia, LLC. All Rights Reserved Follow Us: