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I find the yield curve for bond rates confusing. For example, the current yield curve for US treasuries is shown below:

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The difference between the 10-year bond and the 30-year bond is tiny, just 0.15%. This seems like a negligible premium to receive for assuming an additional 20 years of risk.

Is there a theory that explains this counterintuitive (to me) condition?

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There is the market segmentation theory.

The demand on the longer end of the yield curve in theory comes from institutional investors, pension funds, insurance companies, foreign central banks etc. who prefer longer durations.

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There is convexity, where holding longer bonds is inherently more valuable in the context of volatility.

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