Bonds & rates
Yield curve
A chart of government bond yields across maturities, from months to decades.
How it works
Normally it slopes upward: lending for longer demands more compensation. Its shape summarises what markets expect from growth, inflation and central bank policy.
The curve is the reference for pricing almost everything else. Mortgage rates, corporate borrowing costs and equity discount rates all key off it.
Related terms
- Inverted yield curveWhen short-term bonds yield more than long-term ones — historically a recession warning.
- Yield to maturityThe total annual return from holding a bond to maturity, counting coupons and any price gain or loss.
- DurationHow much a bond’s price moves when interest rates change, expressed in years.
- Term premiumThe extra yield investors demand for lending long rather than rolling short-term loans.
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