From the course: Economic Indicators

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Interest rates and yield curve

Interest rates and yield curve

From the course: Economic Indicators

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Interest rates and yield curve

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- Interest rates are what you pay on money you borrow, whether it's for a mortgage, student loan, car loan, or credit card. But where do those interest rates come from? Well auto loans, mortgages, and even bank savings account interest rates all come from something called the yield curve. Which is a visual depiction, a curve, of interest rates paid on government debt that goes out 30 years in the future. Once you know what it is, you might want to look at the yield curve before getting your next mortgage or car loan. It's probably a good indication of whether you are getting a good deal or if you're paying a lot of extra interest on those loans. The yield curve is made up of government debt rates that go out 30 years, and these are considered risk-free interest rates. This entire curve can be found at no cost on the Department of the Treasury website. You can see this list of time periods from one month to 30 years. These are the different rates for government debt for each of these…

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