Define: Yield Curve

UK Accounting Glossary

Definition: Yield Curve

Quick Summary

What is the dictionary definition of Yield Curve?

Dictionary Definition

The Yield Curve is a curve on a graph on which the yield on deposits or fixed-interest securities are plotted against the length of time they have to run until Maturity. The yield curve typically slopes upwards, indicating that investors anticipate receiving a premium for holding onto securities that have a long time to run.

A negative yield curve (down-sloping curve) may occur however, when the market expects falling interest rates or deflation.

A flat (or humped) yield curve usually expressive of uncertainty in the market.

Full Definition