Yield Curve Approximation

A yield curve is a graph that plots the yields (interest rates) of bonds with the same credit quality but different maturity dates. It helps investors understand the relationship between short-term and long-term interest rates.
🔹 Types of Yield Curves

1️⃣ Normal Yield Curve – Upward-sloping, indicating economic expansion.
2️⃣ Inverted Yield Curve – Downward-sloping, often a recession warning.
3️⃣ Flat Yield Curve – Suggests economic uncertainty or transition.

The yield curve is widely used to predict economic conditions and interest rate movements. You can learn more about it here. Would you like insights on how traders use the yield curve for investment decisions?
How to Trade Using This?

✅ If the yield curve is steepening (green) → Favor growth stocks, commodities, and high-risk assets.
✅ If the yield curve is flattening or inverting (red) → Consider bonds, defensive sectors, or hedging strategies.
✅ Pair with economic news and interest rate decisions to refine predictions.