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Flat Yield Curve

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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.

flat yield curve
At a particular time, similar yields on bonds of similar risk at all maturity lengths. During a period of a flat yield curve an investor would receive approximately the same yield on a long-term bond as he or she would on a short-term bond, although the former would be subject to greater price fluctuations.


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But the increases we have seen in the yield curve, coupled with a relatively flat yield curve for real TIPS, warrant an ever-watchful eye to make sure that inflation expectations do not creep up.
The environment for the banking industry has grown difficult over the past several years, the result of historically low interest rates, flat yield curves and significant margin compression.
An inverted to flat yield curve for much of 2007 limited the bank's ability to make money last year, officials said.
 
 
 
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