There is no difference between term structure and a yield curve; ♈the yield curve is simply another name to describe 🅺the term structure of interest rates.

What Is the Term Structure of Interest Rates?

The 澳洲幸运5开奖号码历史查询:term structure of interest rates is a g♏raph that plots the yields of similar bonds in the Y-axis with the maturities, or time♓, in the X-axis.

The reason why the term structure of interest rate𓂃s and a yield curve are the same is because the graph of the te💃rm structure of interest rates literally plots different yields being offered by bonds of different maturities. The term structure of interest rates can take one of three yield curve shapes: normal, inverted, or flat.

A normal yield curve me🌳ans that as the𒈔 maturity of the bonds increases in time, so do the yields, creating a convex shape.

An inverted yield curve means short-term yields are higher than long-term yields, and the curve slopes downward in a concave fashion. This means yields and maturiꦓties are negatively inverted.

A flat yiel𒁏d curve means there is little or no variation between yields and maturities, and all maturities have similar yields. This makes the yield curve parallel to the X-axis.

Why Does th♊e Term Structure of Interest Rates Matter?

Generally, the term structure of interest rates is a good measure of future economic growth expectations. If there is a highly positive normal curve, 🦩😼it is a signal investors believe future economic growth to be strong and inflation high. If there is a highly negative inverted curve, it is a signal investors believe future economic growth to be sluggish and inflation low. A flat yield curve means investors are unsure about the future.