Killik Explains: Fixed Income Basics - the yield curve

Yield curves can reveal how bond investors see the future and help to guide borrowers on the direction of interest rates. Here I cover all the basics.

[anne-mariew.]

Well explained and summarized, thank you! Helped me get back into topic.

[bganbesfien]

Dear Sir, i have a not-so-clever question, agree on that in [6:20]th min the right side of curve will have lower YTM when investors "pile-in", but as central Banks also cuts interest rate, i think the short term part of the curve will be lowered too, the left side of the curve. I can't logically imagine "an inverted yield curve".

[butt.]

while bond logic says price rises and yields fall, QE doesnt cause yields to drop infact the exact opposite

[GreenspudTrades]

The short duration part of the yield curve is not set by the free market, but is manipulated by policy makers. What is the unintended consequence of this manipulation? If the short term duration is rigged, what does that say about how trustworthy and interpretation of the longer durations would be? Wouldn't manipulation on one end have some indirect effect on the other side of the graph?

[CommandoX]

Here's a link to Tim Bennett's earlier video on this same topic of the bond-yield curve, from when he worked for MoneyWeek rather than for Killik & Co.:


Personally, I feel Bennett's Moneyweek series is quite better than his Killik & Co. — the white-board style of the former, as well as the more tempered pacing, feel to be more helpful. (Having said that, in this instance, the present segment — Killik & Co. — I believe is excellent.)