inverted yield curve

See yield curve slope. American Banker Glossary
When short-term interest rates are higher than long-term rates. Antithesis of positive yield curve. Bloomberg Financial Dictionary

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   A chart pattern that shows yields on short-term securities above those on long-term securities. This is a reversal of a normal yield curve, where long-term rates are higher to reflect the risk of holding securities for a longer time. An inverted yield curve may reflect fears of a glut of short-term paper, which pushes down prices and pushes up yields, or of a shortage of long-term securities, which pushes up prices and pushes down yields. It may also reflect expectations that inflation will be lower in the long term than in the short term, producing an eventual drop in yields. An inverted yield curve is also known as a negative yield curve.

Financial and business terms. 2012.

Look at other dictionaries:

  • Inverted Yield Curve — An interest rate environment in which long term debt instruments have a lower yield than short term debt instruments of the same credit quality. This type of yield curve is the rarest of the three main curve types and is considered to be a… …   Investment dictionary

  • inverted yield curve — Fin a yield curve with lower interest rates for long term bonds than for short term bonds. See also yield curve …   The ultimate business dictionary

  • yield curve slope — Yield curves also describe the amount of difference between short term and long term rates. A yield curve that depicts the customary situation of long term rates higher than short term rates is called an upward sloping or positively sloped yield… …   Financial and business terms

  • Yield curve — This article is about yield curves as used in finance. For the term s use in physics, see Yield curve (physics). Not to be confused with Yield curve spread – see Z spread. The US dollar yield curve as of February 9, 2005. The curve has a typical… …   Wikipedia

  • yield curve — A chart in which the yield level is plot on the vertical axis and the term to maturity of debt instruments of similar creditworthiness is plotted n the horizontal axis. The yield curve is positive when long term rates are higher than short term… …   Financial and business terms

  • Yield Curve — A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three month, two year, five year and 30 year U.S. Treasury… …   Investment dictionary

  • Yield curve — The graphical depiction of the relationship between the yield on bonds of the same credit quality but different maturities. Related: Term structure of interest rates. Harvey (1991) finds that the inversions of the yield curve (short term rates… …   Financial and business terms

  • yield curve — Fin a representation of relative interest rates of shortand long term bonds. It may be normal, flat, or inverted …   The ultimate business dictionary

  • Normal Yield Curve —    A chart illustrating that yields on long term securities are at higher rates than the rates on short term securities, to reflect the extra risk of holding them for a longer period. Also known as a positive yield curve. The opposite of an… …   Financial and business terms

  • Humped Yield Curve — A relatively rare type of yield curve that results when the interest rates on medium term fixed income securities are higher than the rates of both long and short term instruments. Humped yield curves are also known as bell shaped curves. A… …   Investment dictionary

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