Learning Goal: I’m working on a finance question and need an explanation and answer to help me learn.
Could you please explain more I attached the files you sent before:
A- Construct two yield curves for October 2021 and October 2022 (this is a graph). how did you construct the 2021 curve? yields are less than one percent
B- Explain why they have different curves?
The sentence:
“The rise of just 0.01 percentage points might indicate a shift in the market’s view of future inflation.” but there is no long term here, this is short term. Could you please elaborate?
The sentence:
“Optimism that interest rates will fall in the future is shown by a yield curve that slopes downward”
thus,
2021 indicate uncertainty (flat curve)
2022 indicate economic growth (normal yield curve)
Could you please elaborate?