Yield Curve

I think it would be easier to understand yield curve by showing a couple...

Suggestion by Tim Plaehn on 2008-01-14 17:40:03

I think it would be easier to understand yield curve by showing a couple of charts from various points in recent history, showing positive, flat and inverted curves. The yield curve is described pretty well here, but seeing it would help understanding. The one charts in this article would be more understandable with a stronger knowledge of the yield curve. Another area that I think should be covered is the effect that the Federal Reserve policies have on the different maturities on the curve. I.e. the Fed has tremendous influence on short term rates, while longer term rates are more market driven. Finally, I think the practice of borrowing short and lending long is rarely practiced. If banks can pay 1% on savings and get 18% on credit cards, they do not have to lend long. For longer term lending products, they are most often repackaged into securities and resold, after fees are generated of course.

Add comments or discussion related to this suggestion here.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.