Normal yield curve,
Definition of Normal yield curve:
Ordinary situation in financial markets where the yields on long-term debt instruments are higher than yields on the short-term ones. Also called positive yield curve.
The normal yield curve is a yield curve in which short-term debt instruments have a lower yield than long-term debt instruments of the same credit quality. This gives the yield curve an upward slope. This is the most often seen yield curve shape, and it's sometimes referred to as the "positive yield curve.".
Analysts look to the slope of the yield curve for clues about how future short-term interest rates will trend. When there is an upward sloping yield curve, this typically indicates an expectation across financial markets of higher interest rates in the future; a downward sloping yield curve predicts lower rates.
How to use Normal yield curve in a sentence?
- The normal yield curve is a yield curve in which short-term debt instruments have a lower yield than long-term debt instruments of the same credit quality.
- A downward sloping yield curve predicts a decrease in future interest rates.
- An upward sloping yield curve suggests an increase in interest rates in the future.
Meaning of Normal yield curve & Normal yield curve Definition