- The market's expectation of the future interest rate. If investors expect a higher interest rate in the future, then the curve would be upward sloping. Otherwise if the market is anticipating a falling interest rate, then the curve would be downward sloping.
- Risk premium. Longer maturities entail greater risks for the investor, thus investors would expect a higher return for longer term investments.
- Supply and demand. If there is a higher demand or lower supply for bonds with a certain maturity, then the yield for those bonds would go down.