Yield Curve
A graph depicting interest rates on bonds of equal credit quality across varying maturity dates.
Detailed Definition
Under normal economic conditions, longer-term bonds pay higher yields than short-term bills to compensate for duration risk (upward-sloping). An inverted yield curve—where 2-year yields exceed 10-year yields—is one of the most reliable historical harbingers of an upcoming economic recession.
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A monetary policy stance favoring low interest rates and stimulus to encourage economic growth.
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Foreign currency assets and bullion held by a central bank to back liabilities and stabilize currency.
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A sustained decline in the general price level of goods and services, increasing the purchasing power of money.