While Federal Reserve transparency has likely helped reduce professional forecasters' errors for the short end of the yield curve, forecast errors for the long end of the yield curve
have had little reduction.
According to de Leon, there was a demand from the institutional investors on the long end of the yield curve
that allowed them to recognize their participation in the auction: 'The institutional investors would also need to fill their requirements for the yield pick up and also for the longer maturity.'
Despite rather flat rates on the long end of the yield curve
, pro-growth forces are in place that likely will drive them up, Sega said.
A supply-side rebound would likely trigger upward pressure on the long end of the yield curve
, giving the Fed more room to raise rates.
Seth Meyer, a portfolio manager and analyst at Janus, intends to watch the long end of the yield curve
, since "signficant flattening" during the tightening cycle may signal that the markets "fear the Fed may be tightening at the wrorng time in the cycle," he said.
Fundamentally, however, when one discusses short term interest rates, the long end of the yield curve
must be used as a benchmark.
Liquidity "Islamic banks have struggled in managing their liquidity as well as profit-rate risk due to the absence of having instruments at the short and long end of the yield curve
," Hasan Bilgrami, chief executive at Karachi-based BankIslami Pakistan, said in a May 31 interview.
The long end of the yield curve
moved 10bp north, as some foreign players sold local currency bonds.
in an attempt to keep the long end of the yield curve
Since an explicit goal of the paper is to explain volatility at the long end of the yield curve
, this answer is not satisfactory.
Long-term Treasury yields increased more than 30 bp from the beginning of April, resulting in a noticeable steepening at the long end of the yield curve
. The 20-year Treasury rate rose to 5.37% (the highest level in almost two years), while the 10-year rate reached 5.14% (the highest in almost four years.)