Under Expectations Theory, the shape of the yield curve tells you what the market thinks rates will do:

- **Upward sloping (normal)** → rates expected to **rise**
- **Downward sloping (inverted)** → rates expected to **fall**
- **Humped** → rates expected to **rise then fall**
- **Flat** → rates expected to **stay the same**

The yield curve is essentially the market's collective forecast for future interest rates.