To understand yield curves, let’s review some basics using the U.S. Treasury yield curve as an example. When investors buy Treasury securities, they’re lending money to the government. In exchange, the Treasury promises to return their principal investment after a set period of time—at maturity—and pay them a fixed rate of interest on the loan—a.k.a. the coupon.
Interest rates on bonds sold by the same issuer with different maturities behave quite differently, depending on how investors are feeling about risk, trends in the broader market and the performance of the economy as a whole. A yield curve lets you visualize the different rates for different maturities on one chart.
Advisor As the federalreserve said, “f**k value investors.”
Advisor 'a yield curve, a tool that helps understand the health of the US economy ?' Really ?