This type of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession.
As the term «normal» suggests, this is the most common
type of yield curve.
There are three main
types of yield curve shapes: normal, inverted and flat (or humped).
Not exact matches
Secondary real estate cities outside
of core gateway cities such as New York, London, Tokyo, Los Angeles, San Francisco, Paris, Hong Kong, Sydney, Seoul, and Shanghai continue to provide opportunities for
yields in markets and asset
types that fall farther along the risk
curve than those available in gateway markets that are saturated.
In Australia, we have come to think
of the downward sloping
yield curve as the norm, and banks have developed cash management -
type products to cater for those wishing to capitalise on high short term interest rates.
In contrast to simpler «
yield -
curve spread» measurements
of bond premium using a fixed cash - flow model (I - spread or Z - spread), the OAS quantifies the
yield premium using a probabilistic model that incorporates two
types of volatility:
the relationship between interest rates and time, determined by plotting the
yields of all or as many bonds
of similar credit quality (eg: Treasuries or AA - rated Corporates), against their maturities;
yield curves typically slope upward since longer maturities normally have higher
yields, although it can be flat or even inverted; the Fixed Income Search Results Scattergraph shows several smoothed
yield curves for different fixed - income product
types and credit qualities; these are based on bonds that Fidelity recognizes and are not equal to the entire universe
of bonds, which is significantly larger than the number
of bonds offered by Fidelity on any given day
If quantitative easing is successful in reducing the overall government debt
yield curve or injecting money into the system, but there is no trickle down effect to corporate bonds for example, then the central bank can target specific maturities and specific
types of debt instruments (corporate bonds OR auto loans, mortgage backed securites, etc.) to achieve the desired effect.