From a central bank and economic policy point of view,market yield level comprises two factors: the expectedbaseline scenario and the term premium. In markets linkeddirectly or indirectly to the central bank base rate, theexpected yield level is usually closely tied to the reference rate.Thus, this component reflects the actual expectations aboutthe central bank’s interest rate policy. The term premiumcomponent of yields is composed of multiple factors, andexperience shows that it increases with the length of maturity.In general, central bank measures only