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. The most frequently reported yield curve compares the threemonth, twoyear, fiveyear and 30year 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. The curve is also used to predict changes in economic output and growth.
BREAKING DOWN 'Yield Curve'
The shape of the yield curve is closely scrutinized because it helps to give an idea of future interest rate change and economic activity. There are three main types of yield curve shapes: normal, inverted and flat (or humped). A normal yield curve (pictured here) is one in which longer maturity bonds have a higher yield compared to shorterterm bonds due to the risks associated with time. An inverted yield curve is one in which the shorterterm yields are higher than the longerterm yields, which can be a sign of upcoming recession. A flat (or humped) yield curve is one in which the shorter and longerterm yields are very close to each other, which is also a predictor of an economic transition. The slope of the yield curve is also seen as important: the greater the slope, the greater the gap between short and longterm rates.

Normal Yield Curve
A yield curve in which shortterm debt instruments have a lower ... 
Inverted Yield Curve
An interest rate environment in which longterm debt instruments ... 
Term Structure Of Interest Rates
The relationship between interest rates or bond yields and different ... 
Yield Elbow
The point on the yield curve indicating the year in which the ... 
Humped Yield Curve
A relatively rare type of yield curve that results when the interest ... 
Flat Yield Curve
A yield curve in which there is little difference between shortterm ...

Investing
Trade Bond ETFs Using Yield Curves
Different types of yield curves provide important insights for trading bondbased securities. 
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. 
Markets
Understanding The Treasury Yield Curve Rates
Treasury yield curves are a leading indicator for the future state of the economy and interest rates. 
Markets
Understanding Term Structure of Interest Rates
The term structure of interest rates is a common method of valuing bonds. 
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. 
Investing
Understanding the Inverted Yield Curve
An inverted yield curve occurs during the rare times when shortterm interest rates are higher than longterm interest rates. 
Investing
The Impact Of An Inverted Yield Curve
Find out what happens when shortterm interest rates exceed longterm rates. 
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. 
Markets
Bond Yield Curve Holds Predictive Powers
This measure can shed light on future economic activity, inflation levels and interest rates. 
Investing
Yield Curve
Learn more about how this curve is used to predict changes in economic output and growth.

Why are the term structure of interest rates indicative of future interest rates?
Learn why economists believe the term structure for interest rates reflects investor expectations for future interest rates ... Read Answer >> 
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 >> 
How can the yield curve help me make investment decisions?
Learn about the yield curve, and discover why this chart is an important economic indicator. How do Treasury bond yields ... Read Answer >> 
What is the difference between term structure and a yield curve?
Understand the difference between the term structure of interest rates and a yield curve, if any. Learn what the yield curve ... Read Answer >> 
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 >> 
What does the yield curve actually predict?
Find out what an inverted yield curve represents, how it has performed as a leading indicator and why it appears to hold ... Read Answer >>