Yield Curve

A graph that expresses the relationship between yields on fixed-term securities and their time remaining to maturity.

A yield curve depicts the expected rate of return on securities investments per time interval until the debt is due. Investors and analysts use it to gauge public appetite for investment and the state of the economy.

The x axis on a yield curve represents the years or months left on the investment instrument and the y axis stands for the expected interest rates. On a normal yield curve, longer-term instruments have a higher interest rate than shorter-term ones.