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Yield Curve
The yield curve plots the yields on government bonds of different maturities, from a few months to 30 years or more. Normally longer bonds pay more, because lenders want extra reward for tying up money longer, so the curve slopes upward.
Why It Matters
When short-term rates rise above long-term rates, the curve “inverts”, which has often preceded recessions.
In India
When markets expect the RBI to cut rates, short-term yields tend to fall faster than long-term ones, steepening the curve.
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