Yield curve

The yield curse is the curve that traces the variation of interest rates between the shortest and the longest terms loans annualized so they can be compared. Under normal economic circumstances the annualized rate on long term loans is higher than the annualized rate on short term loans. Economists get upset when rates change and short term rates are higher than long term rates. This is the infamous inverted yield curve and usually means that general market sentiment is that the economy may be heading for recession.

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