And this is the yield curve.

That's called an inverted yield curve.

So when most people talk about the yield curve, they're talking about the treasury yield curve.

So when most people talk about the yield curve, they're talking about the risk free yield curve.

So this is the treasury yield curve.

And that's what the yield curve tells us.

So the current yield curve looks something like this.

So let me draw a yield curve right over here.

Let me draw this yield curve right over here, so this is maturity on the horizontal axis, and this is yield, and I'm gonna draw the yield curve for treasuries.

So the next question is, well, what determines this yield curve?

And lets say that the yield curve before looked like this.

And maybe, at this point, the yield curve looks like that.

Now you could also have a yield curve for other types of debt.

So I'm going to introduce you to the concept of the yield curve.

And so let's draw the yield curve and see if this holds true.

And so you now hopefully at least understand what the yield curve is.

And you have some intuition on why the yield curve has this shape.

Yield, Wotan, yield!

But it might be to explicitly control the yield curve further out, so that the borrowing cost for longer debt goes down, so that the yield curve looks something like that.

To understand what he's talking about, let me draw a yield curve right over here.

let's say, let's do the yield curve for treasuries, maybe it looks something like this.

So with that out of the way, let's talk about what the yield curve is.

But hopefully at this point you have a sense of what the yield curve is.

Yield

Yield

Yield

Yield.

So what that would do is it would lower the short term of the yield curve.

I have a whole video on this, especially the ones where I talk about the yield curve.

New yield

Current yield

Explosive yield

Yield, Leonidas.

Pure spirals versus pure ellipticals.

And hopefully, after about the next five or ten minutes, you will know a lot about the yield curve.

curve

Curve

Curve

The other thing is that they're buying things maybe further down the yield curve, so they're trying to control the yield curve itself, and they're maybe buying less traditional securities with the goal of maybe making those markets a little bit more operational.

Scale by yield

How's the yield?

What's the yield?

Adjust Curve

Luminosity Curve

C Curve