Tuottokäyrä

Tuottokäyrä, known in English as the yield curve, is a graphical representation of the yields on debt instruments of varying maturities, typically government bonds. The horizontal axis of the curve represents the time to maturity, while the vertical axis shows the yield. The shape and slope of the yield curve provide important insights into market expectations about future interest rates and economic conditions.

A normal yield curve slopes upward, indicating that longer-term debt instruments have higher yields than shorter-term ones. This is generally considered a sign of a healthy and growing economy, as investors expect interest rates to rise in the future. An inverted yield curve, which slopes downward, suggests that investors expect interest rates to fall, often signaling an impending economic slowdown or recession. A flat yield curve indicates that yields are similar across different maturities, often a transitional phase between a normal and inverted curve, or vice versa.

The term structure of interest rates, which the yield curve illustrates, is influenced by several factors including inflation expectations, monetary policy, and liquidity preferences of investors. Central banks closely monitor the yield curve as it can be a leading indicator of economic activity. Financial institutions use the yield curve for pricing loans and other financial products, as well as for managing their interest rate risk.