Sentences with phrase «of the yield curve means»

A flattening of the yield curve means longer - term rates are falling in comparison to short - term rates, which could have implications for a recession.

The experts can agree neither on which way interest rates will go next nor on what the shape of the yield curve means for interest rates in the future.

Not exact matches

Achievement of these goals was considered by the HRC as very challenging, even aggressive, given the expected modest economic growth for 2007 for the financial services industry, the impact and duration of the on - going flat / inverted yield curve (meaning short - term interest rates that are virtually equal to or exceed long - term interest rates, thus lowering profit margins for financial services companies that borrow cash at short - term rates and lend at long - term rates), potentially higher credit losses, fewer available high - quality, high - yielding loans and investment opportunities, and a consumer shift from non-interest to interest - bearing deposits.

Bond market geeks refer to this as a «flattening of the yield curve,» meaning that shorter - term interest rates rose while longer - term interest rates fell.

In today's «Trends and Tail Risks» I review what the yield curve is saying now and what it means for the world of investing.

As of Nov. 23, however, the 10 - year Treasury yield was just 2.34 percent and the yield curve had «flattened,» meaning short - term yields had risen in comparison to long - term yields.

What this means is that there are intrinsic levels of risk affecting the yields on high quality corporate debt, lessening the positive slope of their spread curves, or with agencies inverting the spread curves.

When you start to see the yield curve flatten or even invert, meaning short - term rates become equal to or higher than long - term rates, and the line either becomes flat or sloped lower from left to right, then that usually signals trouble ahead in terms of a recession and lower market prices.

«exceptionally low levels for the federal funds rate for an extended period» means that the short end of the yield curve will stay flat as a pancake.

In the short - run, it means the long end of the yield curve will rally, in the long run, macroeconomic forces will dominate.

Means the front end of the yield curve will hug zero for some time, absent a crisis in inflation or credit.

As we had seen following the BoJ announcement on September 24, the movement away from signaling ever increasing amounts of QE and negative interest rate policy (NIRP) means a better environment for bank stocks, as steeper yield curves imply better margins and higher profits for banks.

This means the government is financing itself at close to zero cost for its short term borrowing and, further out on the curve, the cost of financing does not go up by much; as the yield - to - worst on the S&P / BGCantor 7 - 10 Year U.S. Treasury Bond Index is now at 1.48 %.

Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program.

For example, while a slowdown in economic activity might have negative affects on current real estate prices, a dramatic steepening of the yield curve (indicating an expectation of future inflation) might be interpreted to mean future prices will increase.

The flattening of the bond yield curve in recent years meant you might pay only 1 % or 1.5 % more to lock in a long - term rate, and that made the stability of fixed rates much more attractive than it was five years earlier.

If yield curves moving in a parallel direction means the monthly changes at different points in the curve never vary by more than 0.15 %, it means that monthly changes in yield curves are parallel roughly 70 % of the time.

If the bond market believes that the FOMC has set the fed funds rate too low, expectations of future inflation increase, which means long - term interest rates increase relative to short - term interest rates — the yield curve steepens.

And what I meant by the comment about interest rates, commodity prices and the earnings of the S&P 500 is that backtesting models are inherently flawed, since embedded into previous earnings are the data that drive them, like commodity prices, the slope of the Treasury yield curve (and related borrowing costs) and other unanticipated events.

The combination of these two events means that the yield curve should steepen with anchored short - term rates and increasing intermediate to long term rates.

A steep yield curve generally means that inflation expectations are rising or there is great uncertainty of the future, as it implies that people are either (1) reluctant to buy longer term bonds, or (2) are are keeping their funds liquid because they feel uncertain about the future.

Current TIPS yields are below the long - term average real yield of both nominal bonds and TIPS, but the steepness of the TIPS yield curve means longer - maturity TIPS are yielding higher percentages of both the historic real return on nominal bonds of the same maturity and the historical yield on TIPS.