Parallel shift in the yield curve

(redirected from Parallel Shifts in the Yield Curve)

Parallel shift in the yield curve

A shift in economic conditions in which the change in the interest rate on all maturities is the same number of basis points. In other words, if the three month T-bill increases 100 basis points (one %), then the 6-month, 1-year, 5-year, 10-year, 20-year, and 30-year rates all increase by 100 basis points as well. Related: Non-parallel shift in the yield curve.

Parallel Shift in the Yield Curve

A change in the yield curve for bonds with different maturities in which the changes in yields occur evenly. For example, given a yield curve for bonds with one-year, five-year, and 10-year maturities, a parallel shift in the yield curve occurs when the yields for all three bonds increase 10 basis points each. See also: Nonparallel Shift in the Yield Curve.
References in periodicals archive ?
average life" test); (2) an expected weighted-average life that extends by more than four years or shortens by more than five years assuming immediate and sustained parallel shifts in the yield curve of plus or minus 300 basis points, respectively (i.