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Dear John, why this sentence means upward sloping yeild curve “The central bank has lowered short term interest rates on a temporary basis to stimulate the economy”, based on the expectation theory, where the interest rate are expected to rise, then the yield curve will slop upward and vice versa.
many thanksIf the short term interest rate is lower on a temporary basis, then we will expect interest rates to rise in the future.
If interest rates are rising in the future then the yield curve will slop upwards.
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