Humped Yield Curve

DEFINITION of 'Humped Yield Curve'

A relatively rare type of yield curve that results when the interest rates on medium-term fixed income securities are higher than the rates of both long and short-term instruments. Humped yield curves are also known as bell-shaped curves.

BREAKING DOWN 'Humped Yield Curve'

A market with a humped yield curve could see rates of bonds with maturities of one to five years trumping those with maturities of less than one year or more than five years. However, this type of yield curve does not happen very often. Although a humped yield curve is often an indicator of slowing economic growth it should not be confused with an inverted yield curve.

RELATED TERMS
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, ...
  2. Positive Butterfly

    A non-parallel yield curve shift in which short- and long-term ...
  3. Term Structure Of Interest Rates

    The relationship between interest rates or bond yields and different ...
  4. Yield Elbow

    The point on the yield curve indicating the year in which the ...
  5. Riding the Yield Curve

    A trading strategy that is based upon the yield curve and used ...
  6. Par Yield Curve

    A graph of the yields on hypothetical Treasury securities with ...
Related Articles
  1. Investing

    Trade Bond ETFs Using Yield Curves

    Different types of yield curves provide important insights for trading bond-based securities.
  2. Markets

    Will an Inverted Yield Curve Happen Again?

    Explore the causes of inverted yield curves, their frequency, their accuracy in forecasting recessions and whether this type of event can happen again.
  3. Markets

    U.S. Recession Without a Yield Curve Warning?

    The inverted yield curve has correctly predicted past recessions in the U.S. economy. However, that prediction model may fail in the current scenario.
  4. Investing

    Yield Curve

    Learn more about how this curve is used to predict changes in economic output and growth.
  5. Markets

    Bond Yield Curve Holds Predictive Powers

    This measure can shed light on future economic activity, inflation levels and interest rates.
  6. Managing Wealth

    Interest Rates And Your Bond Investments

    By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it.
  7. Markets

    How Healthy Is The Economy, Really? This May Be The Only Way To Tell

    For many market strategists, the Federal Reserve's multi-trillion-dollar stimulus program has had one huge drawback.The Fed's massive quantitative easing (QE) programs have rendered what's known ...
  8. Managing Wealth

    How Bond Market Pricing Works

    Learn the basic rules that govern how bond prices are determined.
  9. Markets

    What Is Supply?

    Supply is the amount of goods a producer is willing to produce at a given price, and is one of the most basic concepts in economics.
  10. Markets

    Understanding the Laffer Curve

    The Laffer Curve is a graph that shows how changes in tax rates can influence economic growth.
RELATED FAQS
  1. What is the current yield curve and why is it important?

    Understand what the current yield curve represents, and learn how market analysts commonly interpret various changes in the ... Read Answer >>
  2. What are the different formations of yield curves?

    Find out more about the yield curve and yield curve formations, what yield curves measure and the three main types of yield ... Read Answer >>
  3. Below is an example of US Treasury yields for various maturities ...

    The correct answer is b. A normal yield curve chart shows long-term debt instruments having higher yields than short-term ... Read Answer >>
  4. What is the correlation between term structure of interest rates and recessions?

    Discover the importance of the term structure of interest rates, also known as the yield curve, and its predictive power ... Read Answer >>
  5. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
  6. 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 ... Read Answer >>
Hot Definitions
  1. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center