flat yield curve

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.

flat yield curve

At a particular time, similar yields on bonds of similar risk at all maturity lengths. During a period of a flat yield curve an investor would receive approximately the same yield on a long-term bond as he or she would on a short-term bond, although the former would be subject to greater price fluctuations.
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. Personally, I doubt it.
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.
"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."
A rising interest rate environment along with a flat yield curve doesn't bode well for bonds, said Renasant Investment Officer Jake Heyer.
That plan required extensive loans sales in 2017 of almost $100 million to maintain compliance with the regulatory loan concentration guidelines applicable to the Bank, and adversely impacted our ability to generate profits in the first quarter, particularly given the relatively flat yield curve that has squeezed interest margins.
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.
Particularly as the central bank is targeting, among other things, a flat yield curve; Fed rate hikes will push up yields at the long end of the curve and necessitate hikes by the Turkish central bank.