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Definition of yield curve According to Investopedia, the yield curve graphs the relationship between bond yields and bond maturity More specifically, the yield curve captures the perceived risks of bonds with various maturities to bond investors The US Treasury Department issues bonds with maturities ranging from one month to 30 yearsA yield curve is simply the yield of each bond along a maturity spectrum that's plotted on a graph It provides a clear, visual image of longterm versus shortterm bonds at various points in time The yield curve typically slopes upward because investors want to be compensated with higher yields for assuming the added risk of investing in longerterm bondsA "normal" yield curve has higher long term interest rates than short term rates, so usually a flattening of the yield curve is referring to the fact that the long term rates are coming down, although in principle it could be that short term rates are rising, or some combination of the two Did