Bonds with longer maturities often have greater yields than those with shorter maturities 

This is because long-term bonds are riskier, and investors demand a higher return for taking on that risk 

A steep yield curve indicates a strong economy, with investors expecting future interest rate increases 

A flat yield curve, on the other hand, indicates a weak economy, with interest rates likely to remain low 

An inverted yield curve, where short-term bonds have higher yields than long-term bonds, is a strong predictor of a recession 

For bond investors, the shape of the yield curve has important implications 

In a normal yield curve environment, investors may choose to invest in longer-term bonds to earn higher yields 

However, when the yield curve is steep, there is a risk that interest rates may rise, causing the value of longer-term bonds to fall