① Positive yield curve: an upward-sloping interest rate curve, which means that the longer the maturity, the higher the bond interest rate, which generally appears in a period of promising economic prospects.
② Reverse yield curve: a downward-sloping interest rate curve, which indicates that the longer the maturity, the lower the bond interest rate, which usually occurs in the stage when the economy is about to decline, and is an important indicator of economic risk.
(3) Flat yield curve: It means that the interest rates of bonds with different maturities are equal, indicating that the economic development tends to be flat.
(4) Arch yield curve: It shows that the bond interest rate with relatively short maturity is positively correlated with maturity, while the bond interest rate with relatively long maturity is negatively correlated with maturity.
What is the yield curve?
The yield curve is a graph showing the yield of a group of bonds or other financial instruments with the same currency and credit risk but different maturity dates. The vertical axis represents the rate of return, and the horizontal axis is the time from maturity. Different yield curves correspond to different periods of economic development, which is an external manifestation of the law of economic development and an important signal for economists to monitor the economic situation.