Advanced · A10
Reading the Yield Curve
Build the yield curve with your own hands, then read it the way analysts do: by level, slope and change, with two explanations before one conclusion.
By the end of this module, you’ll be able to:
- Build a yield curve from one borrower’s rates across maturities.
- Explain expected short rates and term premium as parts of a long yield.
- Explain why different maturities respond to different forces.
- Read a yield curve by its level, slope and recent change.
- Explain why an inverted curve has no single cause or timetable.
5 parts · about 40 minutes
- 1Build the curve: the builder, and what analysts read inside a long yield
- 2The tenors, one at a time: overnight to the 30-year
- 3Level, slope and change: the four questions and the moves sandbox
- 4The shapes, named: steep, flat, inverted
- 5The famous shape: inversion, then Reading the Yield Curve in one page + a quick check
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