The Yield Curve describes how financial interest rates change over time. The yield “curves” upward over time. It is more expensive to borrow money for 1 year than it is 1 day. Bonds are simply lending, or borrowing. The yield curve is often “controlled” by the Federal Reserve, in some sense. They are the Central Bank of the United States, and have a massive impact on the economy and financial markets. Continue reading “Yield Curve Explained to 6th Graders – Interest Rates, Bonds, Federal Reserve, Lending, Recession”