Hi guys. I've come to learn that an upward sloping curve generally indicates that the financial markets expect higher future interest rates. On the other hand, a downward sloping curve indicates expectations of lower rates in the future.
But what's the reason why it works like this?
| +427 | Don’t work at UBS - UBS Sucks | 37 | 15h |
| +327 | Article - UBS’ Investment Bank Keeps Losing Ground | 41 | 3d |
| +151 | Should My Intern Get a Return Offer? | 50 | 14s |
| +61 | When to Leave Office as Intern | 8 | 5d |
| +60 | Best IB Group Overall? | 35 | 3h |
| +54 | F*ck it I'm Going to Med School | 19 | 9h |
| +39 | Would you rather be a Touse Squid or a Bouse Mogger in IB | 2 | 4d |
| +37 | What do you say to ppl who don’t know EVR/LAZ/CVP/PJT | 29 | 7h |
| +31 | STEM student lost in London IB recruiting | 17 | 3d |
| +27 | [HELP REQUESTED]: Take A2A Promo or Go Corp Dev | 12 | 2h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
1. Bond yields rise with higher future interest rates because investors would demand it. Otherwise they´d just deposit their money in a bank for a relatively high interest rate. The decreasing demand for bonds pushes the bond yields up and the price for bonds down.
2. Bond yields shrink with lower future interest rates because there is less interest to be earned by depositing money in the bank, hence people move to (riskier) securities in order to get their required return. The increased demand for bonds pushes the bond yields down and the price for bonds up.
Cumque vel expedita reiciendis consequatur. Non voluptatum nihil nihil distinctio odio laudantium nostrum. Dignissimos fugiat excepturi in occaecati nam quasi. Ipsum officiis sunt suscipit reprehenderit deserunt.
Ad corporis est et voluptate. Fugiat dolores vel ullam reprehenderit debitis et sunt. Et odio sed quo qui accusantium eos ut. Animi id quaerat nisi exercitationem explicabo fugit porro. Non vel velit error assumenda adipisci veniam.
Voluptatem eligendi molestiae molestias consequatur. Velit veritatis rerum deserunt quod quo dolor dolor voluptas. Qui enim debitis incidunt distinctio quidem amet voluptas. Sed quo ea qui quos in nostrum. Quod nostrum aperiam modi sit. Asperiores et nemo sed perspiciatis nam tenetur magnam. Reiciendis eos alias molestias aliquid asperiores.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...