A mildly upward-sloping yield curve suggests that the market is predicting constant short-term interest rates.

Question

Quizplus · Accepted Answer

A mildly upward-sloping yield curve indicates that the yields on longer-term bonds are slightly higher than those on short-term bonds, which generally reflects market expectations of steady or slightly increasing interest rates in the near future, but does not necessarily indicate any sharp changes in the short-term rates. Therefore, it suggests that the market is predicting constant short-term interest rates.

A Mildly Upward-Sloping Yield Curve Suggests That the Market Is