Glossary · from the DESK dictionary
Yield Curve
A graphical representation of the yields of bonds of equal credit quality across different maturities.
In plain words
Shows whether short-term or long-term bonds currently offer more yield.
In more detail
The yield curve plots yields of one issuer's bonds across maturities. It is the single most important picture in financial analysis, because expectations for monetary policy, growth and inflation can be read from it. For practical work three movements must be distinguished: parallel shift, change in slope and change in curvature — each has different causes and different consequences for a bond portfolio.
Example
A portfolio is immunised against parallel shifts. The curve does not shift in parallel but steepens — the portfolio loses 2.8 percent although duration was correctly hedged.
What it means for traders
One of the single most closely watched macroeconomic chart patterns there is.
Common pitfalls
Historically reliable as a recession indicator, but with a variable and sometimes very long lead time.
Related terms
Bear Flattener · Bear Steepener · Bull Flattener · Carry Trade · Leading, Coincident, and Lagging Indicators · Duration · Inverted Yield Curve · Policy Rate · Principal Component Analysis (PCA) · Yield · Term Premium · Yield to Maturity (YTM)
From the DESK dictionary. For information only, not investment advice.
This is one page of many.
- The DESK dictionary explains more than 9,400 market terms like this one, in English and German – searchable, sorted by topic and difficulty, with favourites.
- Plus the Macro Terminal with more than 900 indicators per country, company pages and a weekly report.
Also open to read: Glossary A–Z · Free calculators · Weekly report archive
DESK is a research tool and not investment advice. Page generated: 2026-10-12.