Term structure of yield volatility

How can term structure of yield volatility by downward sloping if long maturity bonds are generally more sensitive to interest rate changes?

You’re confusing sensitivity to interest rate changes with volatility of interest rate changes.

Long-duration bonds’ prices are more sensitive to interest rate changes than short-duration bonds’ prices. However, short-term interest rates may be more volatile than long-term interest rates. The two effects are independent of each other.


You’re welcome.