Why are short-term interest rates typically higher than long-term interest rates?

Short-term interest rates are typically higher than long-term interest rates because of the increased uncertainty and risk associated with short-term investments. Lenders require higher returns for short-term loans to compensate for the potential fluctuations in the market and the borrower's ability to repay the loan in a shorter period of time. In contrast, long-term investments are considered less risky as they provide a more stable and predictable return over a longer period, leading to lower interest rates.