The yield curve, a graphical representation of the interest rates on debt for a range of maturities, is liquidationproservices.com an essential tool for understanding economic conditions. It shows the relationship between the gunsgutsandgod.com interest rate (or cost of borrowing) and the time to maturity of the debt for a given borrower in a given currency. The yield curve can take three primary shapes: normal, inverted and flat or humped.
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The implications of changes in the feelneed.com shape of the yield curve extend beyond just predictions about economic health. For instance, banks borrow money at short term rates and lend at longer term ones – thus their profits depend on maintaining positive spread between what they earn from loans and what they pay out on deposits (interest). When this spread shrinks (as during an inversion), banks’ profitability could be squeezed leading them to tighten lending standards which could slow down economic activity furthering recessionary pressures.
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