Flattening of the yield curve

(redirected from Flat Yield)

Flattening of the yield curve

A change in the yield curve when the spread between the yield on long-term and short-term Treasuries has decreased. Compare steepening of the yield curve and butterfly shift.

Flattening of the Yield Curve

A change in the yield curve for bonds in which the yield spread on short-term and long-term Treasury bonds decreases. That is, a flattening of the yield curve occurs when either the yield increases for short-term bonds and decreases for long-term bonds, or vice versa. It is important to note that the yield curve is a graphic representation, plotting yield against maturity.
References in periodicals archive ?
A relatively flat yield curve during most of 2007 exerted downward pressure on the net interest margin of the banking industry as a whole as well as Iowa First.
75 percent--while Duncan also predicted the continuation of a flat yield curve, with the 10-year Treasury remaining at 4.
The drop in net income stems from the flat yield curve, which has reduced the spread between what banks pay to borrow money and what they earn lending it out, the bank said.
A flat yield curve is taking away warehouse line gains for some brokers and mortgage bankers.
The credit crisis and flat yield curve are shrinking lenders' profit margins and increasing the pressure for consolidation, especially in the retail financial services sector," Mr.
83 N/A Federal Reserve data on Treasury rates indicates flat yield curve.
The company said a flat yield curve has placed stress on its bottom line.
For example, Schroder markets a High-Return Bond with a seven per cent running yield - also known as the flat yield.
AF funds its adjustable rate loan portfolio primarily with short-term deposits; however, the flat yield curve over the last several years has driven many depositors to shorter term maturities, exposing the company to interest rate risk more so than many of AF's peers.
MacDonough said Westborough Financial has encountered unfavorable business conditions in recent years, putting his institution at a competitive disadvantage at a time of industry consolidation and a flat yield curve that has squeezed industry margins.
During fiscal 2007 and 2008, operating performance had been challenged due to the historically flat yield curve environment and periods of narrowing spreads.
Very flat yield curves preceded the previous two, and there have been two notable false positives: an inversion in late 1966 and a very flat curve in late 1998.