By Schwab Center for Financial Research
A snapshot of yields on a series of bonds. A normal yield curve slopes upward from shorter maturities to longer ones. Investors usually require extra return to tie up their money for longer periods.
Changing yield curve. The slope can change when the Federal Reserve raises short-term rates to slow economic growth and curb inflation, while long-term rates may fall if markets expect lower growth and inflation.
Inverted. If the Federal Reserve raises rates too quickly, short-term yields may actually move higher than long-term yields, leading to an inverted