According to the expectations hypothesis, an upward-sloping yield curve implies that investors in the financial markets expect interest rates to rise above their current levels in the future.

Question

Quizplus · Accepted Answer

The expectations hypothesis suggests that if the yield curve is upward-sloping, it indicates that investors anticipate higher future short-term interest rates, which are reflected in the higher long-term interest rates.

According to the Expectations Hypothesis, an Upward-Sloping Yield Curve Implies