Business and Personal Finance Dictionary

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• NEGATIVE YIELD CURVE
  
  When the current yields of short- and long-term US Treasury securities are plotted to create a graph, the result is a negative, or inverted, yield curve one thats higher on the left when the yield on short-term bills is higher than the yield on long-term bonds. A positive yield curve one thats higher on the right results when the yield on long-term bonds is higher than the yield on the short-term bills. In most periods, the yield curve is positive because investors demand more for tying up their money for a longer period. But there are times, such as when interest rates seem to be on the upswing, that the pattern is reversed and the yield curve is negative.
  
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