{"id":198461,"date":"2021-05-03T12:33:00","date_gmt":"2021-05-03T16:33:00","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/glossary-terms\/yield-curve-2\/"},"modified":"2025-09-22T14:13:28","modified_gmt":"2025-09-22T14:13:28","slug":"yield-curve-2","status":"publish","type":"glossary-terms","link":"https:\/\/www.interactivebrokers.eu\/campus\/glossary-terms\/yield-curve-2\/","title":{"rendered":"Yield Curve"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">A yield curve illustrates the relationship between yield (vertical axis) and maturity (horizontal axis) among bonds of the same credit quality but different maturities. This curve typically slopes upward due to the time value of money, reflecting higher borrowing costs for longer time periods as investors demand compensation for increased risk and the effects of compound interest.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Central banks monitor the yield curve&#8217;s shape as it indicates investor confidence in monetary and fiscal policies. The curve responds dynamically to policy changes and economic data. When investors perceive monetary policy as too restrictive, the curve may flatten, signaling expectations of potential interest rate cuts. During periods of economic pessimism, longer-term yields might decrease significantly as markets anticipate central bank intervention to counter deflation or economic slowdown through reduced borrowing costs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/05\/ibkr-infographic-Yield-us-1100x1925.jpg\" alt=\"The Yield Curve - inverted - flat - indicators\" class=\"wp-image-207947 lazyload\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/1925;width:700px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" \/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>A graph which illustrates the relationship between yield (on the y- or vertical axis) and maturity (on the x- or horizontal axis) among bonds of different maturities and of the same credit quality.<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","meta":{"_acf_changed":false,"footnotes":""},"traders-glossary":[157,167],"class_list":["post-198461","glossary-terms","type-glossary-terms","status-publish","traders-glossary-trading-alphabet","traders-glossary-trading-terms-y"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Archives Term | IBKR Glossary | IBKR Campus<\/title>\n<meta name=\"description\" content=\"A graph which illustrates the relationship between yield (on the y- or vertical axis) and maturity (on the x- or horizontal axis) among bonds of...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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