If short-term rates are high, people usually expect them to come back down. Long-term rates would then drop below short-term rates because the average of expected future short-term rates would be lower than current short-term rates and the yield curve would slope downward and become inverted.
1为什么longterm rates 会drop
因为eople usually expect them to come back down,至于为什么有这个expectation就有各种解释了。然后长期利率等于在长期债券到期前预期短期利率的平均值。这是pet的核心。既然未来的短期利率是要跌的,自然长期利率就要降。
2.,为什么longterm rate 会 一下子掉下去而shortterm rate就不能使它一下子掉下去呢。
长期yield比短期yield低,就会出现反转。