Sentences with phrase «flat yield curve»

I would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come, for several reasons.
And third, the relatively flat yield curve that these policies intentionally produce makes it less profitable for banks to use short - term borrowing to finance long - term assets.
Term premium risk — Flat yield curves tell investors there is no compensation for taking duration risk.
One can see that in the relatively flat yield curve.
This means that the Fed is likely looking at a flat or flatter yield curve in the future.
The rally in risk assets has tightened credit spreads considerably, and the much flatter yield curve presents diminished prospects for extending duration.
Wright's research seems to have been influential in Fed Chair Ben Bernanke's recent assessment that the current very flat yield curve does not signify a coming significant economic slowdown.
«Any concerns that we may have expressed before about an overly flat yield curve, I'd put off to the side until we see things play out.»
That shift highlights the possibility of greater bank lending: Steeper curves and shifting the outlook from ever flatter yield curves (with their attendant declining profits for bank lending) to steeper curves implies greater incentives to make loans.
This activity basically makes it nearly impossible for the Fed to consider raising its overnight lending rate anytime soon; otherwise, a pancake flat yield curve might actually invert.
Jim Bullard, President of the Federal Reserve Bank of St. Louis, says there is no need for the Fed to hike rates any more this year because inflation is still low, further Fed rate hikes could cause the currently flat yield curve to invert, and inflation expectations are still low and stable.
The two - year yield has increased 115 bps (see Exhibit 1), however the long end of the curve has fallen, producing a much flatter yield curve.
Equity markets — Flatter yield curve do not mean lower stock returns.
Still, there is debate within the Fed over whether a flat yield curve is problem.
But we've still got a flat yield curve and will eventually go up.
Federal reserve will not notch them rates until next year (this is consensus, i think), additionally they are only targeting short term rates, not long term rates, we could end up with a flatter yield curve, meaning short term rates equal long term rates.
BMO strategists say higher oil prices should ultimately lead to a flatter yield curve, not a steeper curve as seen last week
The more levered an economy is, the more sensitive it is to shifts in short - term interest rates and a flat yield curve, he argues.
2: Moderate or flat yield curve: 10 - year Treasury yield no more than 2.5 % above 3 - month Treasury yields (this doesn't create a strong risk of recession in and of itself).
The Barron's article pointed this out as well, citing London - based «G+E conomics» head Lena Komileva: «A surplus of investment funds looking for returns in low - yield global markets results in a cap on longer - term yields and a flat yield curve
The group continues to face a series of headwinds, including higher short - term rates, a flatter yield curve, and a housing market that looks to be cooling.
A flat yield curve implies slower growth.
This led to debates among policymakers on whether the Fed should hasten the pace of tightening, which further exacerbated pressure on short - term Treasury yields while leaving long - term rates largely unchanged — hence a flatter yield curve.
A flat yield curve alone would only pave the way, rather than directly trigger events that result in recession, as persistently low long - term bond yields increase the probability and magnify the impacts of balance sheet crises
In recent years, accommodative monetary policy has contributed to low interest rates, a flat yield curve, improved financial conditions more broadly, and a stronger labor market.
It would be no mystery that a flatter yield curve would do little to tighten financial conditions and remain correlated to the «QE trade.»
Hence, a flat yield curve can be seen as a yardstick of ineffective policy normalization focusing on the «wrong part of the term structure.»
«We expect that short rates will continue to increase faster than long rates, leading to a flatter yield curve,» he said.
Currencies with inverted or flat yield curves have better returns, at least on average.
US bond yields have fallen to around 5.4 per cent, much the same as the cash rate, resulting (unusually for this stage of the economic cycle) in a flat yield curve.
This is a flat yield curve.
So, if an investor expects a flat yield curve, they will take a long position in the bond and a short in the note contract.
Learn about the major risks for the bond market in 2016; interest rate increases, high - yield bond volatility and a flatter yield curve may be issues.
Our outlook for growth and inflation supports our preference for equities, including cyclicals — despite the flat yield curve.
The flatter yield curve is not a recessionary signal, so what is it telling us?
Value companies need loans to thrive, and a flat yield curve dries up their loans, which makes value do poorly several months after the yield curve flattens.
So while we can see the extenuating circumstances creating a flatter yield curve, we're not quite ready to declare that it's different this time.
«We expect that short rates will continue to increase faster than long rates, leading to a flatter yield curve,» he said.
In the week just passed, longer - end Treasury yields fell to lows not seen since November 18 while short - end yields meandered providing a flatter yield curve.
A flat yield curve, also called a humped yield curve, is represented by almost similar yields across all maturities.
A short term result of the Fed's continuing increase in the Fed funds rate is a flatter yield curve as seen in the chart of the spread between the 10 - year and two - year treasury notes.
The plot would exhibit a flat yield curve formation.
The example used here (and the default variables in the spreadsheet) has the 30 - year bond's rate the same in both the steep and the flat yield curve situations.
Looking at the Wilshire indexes since 1978 in periods of steep and flat yield curves, the performance profiles of various styles are nearly mirror opposites.
A flatter yield curve makes profits from these transactions tougher to come by.
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