what is a humped yield curve 
a humped yield curve is a relatively rare type of yield curve that results when the interest rates on medium term fixed income securities are higher than the rates of both long and short term instruments also if short term interest rates are expected to rise and then fall then a humped yield curve will ensue humped yield curves are also known as bell shaped curves humped yield curves explainedthe yield curve also known as the term structure of interest rates is a graph that plots the yields of similar quality bonds against their time to maturity ranging from 3 months to 30 years the yield curve thus enables investors to have a quick glance at the yields offered by short term medium term and long term bonds the short end of the yield curve based on short term interest rates is determined by expectations for the federal reserve policy it rises when the fed is expected to raise rates and falls when interest rates are expected to be cut the long end of the yield curve is influenced by factors such as the outlook on inflation investor demand and supply economic growth institutional investors trading large blocks of fixed income securities etc the shape of the curve provides the analyst investor with insights into the future expectations for interest rates as well as a possible increase or decrease in macroeconomic activity the shape of the yield curve can take on various forms one of which is a humped curve 