Bond Basics: Riding the Yield Curve

The simple relationship between long- and short-term interest rates can tell you a lot about the bond market.

Green background with x and y axis in black with yellow curved line and Yield Curve written below the x axis
(Image credit: Getty Images)

Investors should examine the yield curve for Treasury securities as part of their investment decision-making process. A yield curve is a way to measure bond investors' feelings about risk, and can impact the returns you receive on your investments. If you understand how it works and how to interpret it, a yield curve can even be used to help gauge the direction of the economy.

Yield curves track interest rates across different time periods, from one month to 30 years, giving lenders and borrowers an idea of the cost of money over time. The slope of the yield curve predicts interest rate changes and economic activity. You  can use the yield curve to make predictions about the economy to make investment decisions.

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Donna LeValley
Personal Finance Writer

Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation.