In other words, the more levered an economy is, the more sensitive its growth is to central bankers' use of short-term interest rates and a flat yield curve
, and that "historically has coincided with the onset of a recession," he points out.
Jonathan Krane, CEO of KraneShares, said, "China has a very flat yield curve
with relatively high interest rates versus the US, specifically in maturities under one year.
Inflation expectations, pricing behavior and other factors that affect inflation will be closely monitored and the tight monetary policy stance will be maintained, by keeping a flat yield curve
, until there is a significant improvement in the inflation outlook.
Nonetheless, Fitch believes the prolonged low rate environment and flat yield curve
will continue to pressure earnings.
The market consultation revealed that the current liquidity situation expressed by a flat yield curve
shifts market activity significantly into longer terms, in the OTC markets especially into terms over one year, he added.
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.
An inverted to flat yield curve
for much of 2007 limited the bank's ability to make money last year, officials said.
Net warehousing income, which represents the net interest spread between the mortgage rate on a loan and the interest rate paid on a warehouse line of credit, dropped to $245 per loan from $294 per loan in 2005 and $481 per loan in 2004, due to the flat yield curve
In addition, the compression of the net interest margin due to the flat yield curve
and competitive pressures, combined with an increase in our non-accrual loans, all had a negative impact on our profits during our first quarter.
Sales through banks have shown attractive growth and should grow more strongly once the flat yield curve
is replaced by a more favorably shaped positive yield curve.
They point to two recent "near misses" in 1995 and 1998, when a flat yield curve
did not presage slow growth.
Once again, high energy costs, rising interest rates, a flat yield curve
, and a weakening housing market are the major drags on the economy," says North.