In many cases, bond issuers such as companies or governments have several bonds issued, and those different bonds may have different lengths.

IE, they have different maturity dates.

So a problem for investors is comparing them.

Investors once compare the yields to maturity or the return of these bonds across various maturities.

To facilitate this comparison, we construct a yield curve.

A yield curve is a graphical representation of bond yields at various maturities, typically using yield to maturity as the yield metric.

This yield curve shows bonds maturing in the next few months have lower yields required by investors less than 2.5%.

While bonds maturing in 30 years, have higher yields above 3%.

However, when constructing a yield curve, it's crucial to ensure that all the bonds included are from the same bond issuer and have the same credit Quality.

Credit quality refers to the ability of the bond issuer to meet its debt obligations.

Bonds from issuers with higher credit ratings, such as governments or large stable corporations are seen as safer investments, and investors demand lower yields due to the lower risk.

On the other hand, bonds from issuers with lower credit ratings are riskier, which means they often have higher yields to compensate investors for taking on additional risk.

So if we are creating a yield curve for US government debt, we should only use US treasuries, which have the highest credit quality.

Mixing bonds from different issuers or varying credit qualities such as corporate bonds with lower ratings would distort this curve.

This would make it inconsistent and of little value for understanding the pure relationship between yield and maturity.