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 ?
"I am very pleased with the improvement to net income in the quarter, despite the challenges that a flat yield curve presents," stated Joseph Kiley, President and CEO.
They also noted that ripe market conditions such as lower rates, a flat yield curve and chances of higher volatility in equity markets could support gold. 
Perhaps the Fed, fearing an asset bubble and financial instability down the road, was looking to take some steam out of red-hot stock markets, as well encourage an adjustment to very low bond yields and a still quite flat yield curve.
The hottest issues don't really change: taking care of clients and making money in a flat yield curve environment, regulation, irrational competition, etc.
The study reveals that despite the expectation of a relatively near-term end of the economic cycle, investors are not foreseeing a significant correction in fixed income, but rather expect the rare event of a soft landing with a continued flat yield curve, the study added.
As the Donald Trump administration ramps up debt sales to cover a budget deficit projected to hit $1tn next year, a potent mix of a strong dollar, weak stock markets and flat yield curve squeezing the availability of global money that will bring to an end the Fed's rate-hiking cycle sooner rather later.
The margin was squeezed by an increased funding cost against a flat yield. The return on average assets weakened to 1.9% (2.5% in 2016) but still compared well with Lider's peers.
"Further, the unusually flat yield curve provided an opportunity for us to extend the borrower's interest rate protection by providing a term of 15 years with a negligible premium to the 10-year rate."
Dr Nicol said a 2017 experiment at Wongan Hills looking at the influence of N timing across different wheat sowing times and variations in crop maturity resulted in a flat yield response across the treatments but protein levels increased as N applications were delayed.
A rising interest rate environment along with a flat yield curve doesn't bode well for bonds, said Renasant Investment Officer Jake Heyer.
They point to the recessions of 1991, 2000, and 2007-2009 as coinciding with flat yield curves between three-month Treasury Bills and 10-year Treasuries.
Historically, flat yield curves have been associated with tight money and high-interest-rate policies.