Yield Curve

1. What is plotted on the yield curve? Be specific about the X and Y axes. Be specific about which securities' yields are plotted on a yield curve. Answer: U.S. Treasury Yield Curve A yield curve that shows the relationship between yields and maturity dates for a set of similar bonds, usually Treasuries, at a given point in time. Yield curves are used to compare yields of different securities, to benchmark rates and to discover …

…also referred to as the liquidity spread. The opposite situation - short term interest rates higher than longer term rates - will occur in the near future in the U.S. bond market. Yield curves move on a daily basis, representing the market's reaction to news. Based on the market segmentation analysis, the two-year yields are pushed up by Federal Reserve stead increasing rate, while low inflation and strong investor demand helped depress longer-dated yields.