Yield curve
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Search complete. 178 mentions across 34 episodes found for "Yield curve".
Nov 1, 2026
Tina CarsonHOST
I'm Tina Carson, and today we're tackling one of the most fundamental techniques in all of fixed income markets.
Tina CarsonHOST
It's called bootstrapping the yield curve.
Tina CarsonHOST
Here's a question that might seem impossible to answer.
Tina CarsonHOST
What will interest rates be 5 years from now? 10 years from now? You might think that's pure speculation.
Tina CarsonHOST
They use math.
Tina CarsonHOST
Specifically, they use a technique that builds a complete picture of interest rates across all time horizons from a handful of observable bond prices.
Tina CarsonHOST
Why should you care? Because the yield curve touches nearly every financial decision you encounter.
Tina CarsonHOST
When a bank sets your mortgage rate, they consult the yield curve.
speaker_0NARRATOR
Bond Indentures and Covenants.
speaker_0NARRATOR
This is the third and last lesson of Fixed Income Instrument Features, after Current Yield, Yield to Maturity, and the Yield Curve.
speaker_0NARRATOR
This lesson is about the contract behind a bond, where the money to repay it comes from, who gets paid first if things go wrong, and what the issuer promises to do and not do.
speaker_0NARRATOR
It's a lesson where a few clean distinctions earn you most of the marks.
speaker_0NARRATOR
Get the logic here and bond valuation later will feel familiar.
speaker_0NARRATOR
On the exam, you will compute a current yield, state when a bond's realized return equals its yield to maturity, and read a credit spread off two yield curves.
speaker_0NARRATOR
Full yield to maturity mechanics come in later modules.
speaker_0NARRATOR
For now, the exam wants the meaning, the ordering of the yields, and the conditions behind it.
Noel HebertHOST
Yeah, we definitely have seen the Treasury Department recently try to cajole parts of the market or parts of the curve in a given direction.
Noel HebertHOST
But I guess the other question, because we talked a little bit about Warsh and sort of maybe he's not unreluctant to use the balance sheet, but it's not a permanent measure, just a temporary measure, you know, Over the years, and it hasn't really kind of gained a ton of traction in the U.S., but it kind of periodically floats up, you know, yield curve control.
Noel HebertHOST
Do you ever see, and obviously this is a deep hypothetical, but could, you know, the Fed ever sort of intervene in that sort of way in order to sort of control, you know, sort of the benchmark rates at the long end just to kind of, I guess, preserve sort of system functioning?
Greg PetersGUEST
Everything's possible.
Greg PetersGUEST
But I think you'd have to see some of the dynamic shift around spending for the Fed to step in.
Greg PetersGUEST
Otherwise, it's pushing on a string.
Greg PetersGUEST
You know, as just an example, they try to do yield curve control and, you know, the deficit jumps to 10.
Greg PetersGUEST
I don't think that's going to matter necessarily, right? And so I think some other things have to happen fiscally, which I know they're separate and distinct entities, of course.
Benjamin CowenHOST
In 2023, Bitcoin started going down from July.
Benjamin CowenHOST
And it corresponded with the long end of the yield curve going up, right? The 10-year yield was heading higher during that time, as you can see right here.
Benjamin CowenHOST
The 10-year yield started going up.
Benjamin CowenHOST
And you'll note that the 10-year yield is starting to make that move once again.
Zach ZoiaGUEST
So it's, it's, I think last time we were out was in April.
Zach ZoiaGUEST
And it was the yield curve, it just started to pick up a little bit, you know, kind of in, in March, and we were talking about some themes there that I'm sure will continue today.
Zach ZoiaGUEST
But this, you know, certainly a lot has changed.
Zach ZoiaGUEST
in the past six months.
Zach ZoiaGUEST
Yeah, Rich, I'll start and then jump in here.
Zach ZoiaGUEST
But I think this is where first hike in three years.
Zach ZoiaGUEST
And what's really interesting is the yield curve, you know, where a lot of deposits and loans are priced off of like the term part, the one year term, the two year, five year, 10 year parts of the curve.
Zach ZoiaGUEST
They've all been moving higher since the spring in anticipation of this.
speaker_1HOST
Right.
speaker_1HOST
Here we are looking at the yield curve, specifically the spread between the 30 year long term Treasury and the three month short term Treasury.
Gustavo CanoHOST
And the brief points out that this curve was in a deep, historic inversion.
Gustavo CanoHOST
It was sitting at negative 1.7 points, meaning short term debt was actually paying a higher interest rate than long term debt, which is usually a massive recession warning.
speaker_1HOST
That is a bear steepening.
speaker_1HOST
It is brutal for anyone trying to get a mortgage or a long-term business loan because the cost of capital over the next decade becomes incredibly expensive.
Gustavo CanoHOST
So the yield curve isn't a magic crystal ball.
Gustavo CanoHOST
It is just a real time scoreboard telling us exactly how the collective market is weighing the risk of inflation, fiscal deficits and central bank credibility at any given second.
Daren BlonskiHOST
And that's why people tend to sell at the low because they freak out after the fact.
Daren BlonskiHOST
when we look at the yield curve, so this used to be like the only for sure barometer of a recession.
Daren BlonskiHOST
It actually got kind of invalidated during this go around.
Daren BlonskiHOST
When we go below, we have an inverted yield curve.
Daren BlonskiHOST
And then we tend to hit recessions when this shoots up.
Daren BlonskiHOST
We can see that the yield curve now above zero is is back in a more healthy place.
Daren BlonskiHOST
But it's actually working down.
Daren BlonskiHOST
So part of me wonders if it's going to invert again on us.
Sam VadasHOST
One more question, Michael.
Sam VadasHOST
We've seen a lot of tinkering around on the long end of the yield curve, particularly over the summer.
Sam VadasHOST
And we did see more recently, I should say, and we did see Bitcoin sort of rallying as a result of, you know, talk about the debasement trade once again.
Sam VadasHOST
I'm wondering how you are thinking about this is a long term investment theme around the debt in this country.
Sam VadasHOST
I mean, you know.
Sam VadasHOST
Is what we're seeing as far as that 30-year yield and what the government is trying to do right now, is that bullish or bearish for crypto?
Michael SaylorGUEST
You know, in the near term, when the long end of the yield curve or when the entire yield curve is moving up, over the last 12 months, everything's moved up, say, 100 basis points or so.
Michael SaylorGUEST
That's bearish in the near term.
Richard CoffinHOST
While reasons range from high debt levels to aggressive fiscal policy, there's one signal, palmingly referenced, that's a little tricky to understand.
Richard CoffinHOST
The yield curve.
Richard CoffinHOST
While this indicator may look simple enough, there's a lot to interpret from it.
Richard CoffinHOST
And for many, they don't like what they see.
Richard CoffinHOST
Interested? We'll dive into the topic and more on today's Plain Bagel.
Richard CoffinHOST
If you follow the markets, you've probably heard analysts referencing something called the yield curve when discussing the economy.
Richard CoffinHOST
Maybe you've even had a chance to see the elusive curve itself, or perhaps you have no idea what I'm talking about.
Richard CoffinHOST
Regardless, the yield curve has been under the spotlight recently, so it's probably worth taking the time to understand.
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