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in this short revision video, we look at the economics of the bond yield curve.
The yield curve is a way of comparing rates of return on bonds of differing maturity.
Normally we would expect yields on longer-dated bonds to be higher than for shorter-dated securities – because of the risks of inflation going forward).
There are occasions though when the yield curve can become ‘inverted’ - this means that short term interest rates are greater than on long-dated bonds.
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