Flattening of the yield curve

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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 ?
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.
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.
But did people really believe inflation would be tamed, or did perhaps the flat yield curves of the time really represent a good chance that inflation would re-emerge?
This is a change from last quarter when we felt macroeconomic fundamentals were favorable, but flat yield curves had already discounted favorable prospects.
Yield curve inversions have preceded each of the last six recessions (as defined by the NBER, 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.
83 N/A Federal Reserve data on Treasury rates indicates flat yield curve.