Interest Rates and Yield Curves

What this video covers

• The critical distinction between rate volatility and price volatility: short-term rates move more, but long-term bond prices react more to a given rate change
• The four yield curve shapes (normal, flat, steep, inverted) and what each signals about economic growth or recession risk
• Why an inverted yield curve is the most reliable recession predictor on the exam, and the eight-for-eight historical record the test references
• How credit spreads measure default risk by comparing corporate yields to risk-free Treasury yields of the same maturity
• Why credit spreads narrow during economic expansion and widen during recession, and what that means for high-yield junk bond suitability
• The exam trap of confusing yield curves (time, same credit quality) with credit spreads (credit quality, same time)