The yield curve plots interest rates of bonds with equal credit quality but different maturity dates. Normally, longer-term bonds offer higher yields. An inverted yield curve, where short-term rates exceed long-term rates, has historically preceded recessions and is closely watched by investors.
Key Takeaways
- Context matters when interpreting any financial metric.
- Combine multiple data points for informed decisions.
- Continue learning to build investment knowledge.
Quick Reference
Category
economics
Difficulty
Beginner
Reading Time
1 min
Learn More
Where You'll See This
This concept appears throughout stock detail pages and financial data.