Sentences with phrase «shape of the yield curve»

While credit spreads and leading indicators appear to be fairly well behaved, many have noted the sinister looking shape of the yield curve, near its flattest level since before the global financial crisis (see the chart below).

Though I'm not inclined to put much weight on projections or forecasts, the present shape of the yield curve is one that has historically been followed by a parallel upward shift in interest rates at all maturities.

In a balanced economic environment, longer - term investments demand a higher rate of return than shorter - term investments, thus the upward sloping shape of the yield curve.

Rather than selecting two particular maturities, one can also consider more broadly the overall shape of the yield curve, which plots the interest rates on bonds of different maturities.

While credit spreads and leading indicators appear to be fairly well behaved, many have noted the sinister looking shape of the yield curve, near its flattest level since before the global financial crisis (see the chart below).

Interest rate risk: is the risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between two rates, in the shape of the yield curve, or in any other interest rate relationship.

The shape of the yield curve will be an important indicator of things to come.

In doing so, investors are taking on a range of risks such as exposure to changes in the shape of the yield curve, credit spreads or exchange rates.

These rapid changes in the shape of the yield curve marked the peak in the business cycle.

The shape of the yield curve changes in accordance with the state of the economy.

Sustained lower inflation can be expected to change the shape of the yield curve.

The shape of the yield curve is what matters the most.

The shape of the yield curve has been relatively unchanged for the last two years.

Commonly, analysts compare the 10 - year Treasury rate to the Fed Funds rate to determine the shape of the yield curve.

One example is the shape of the yield curve: a flatter US Treasury yield curve (the spread between two - year and 10 - year Treasury notes, which has declined sharply) is historically not a good omen.

The relative movements of short and long rates have seen the shape of the yield curve change noticeably over the past three months (Graph 47).

Their redeeming merit rests in the message told by the shape of the yield curve.

It will be important to monitor developments in the shape of the yield curve given an inverted yield curve has preceded all nine US recessions since 1955.

The application here is that when the Fed tries to affect the shape of the yield curve by FOMC policy, it eventually stops working.

Affecting the value of the bond market (though they occasionally mess around there trying to affect the shape of the yield curve)

* as per the «Liquidity Preference» theory, one of the three fundamental theories that attempt to explain the shape of the yield curve.

The important idea is that the relative performance of a barbell strategy will depend on how the shape of the yield curve changes.

Our research shows that it is not a single risk - free rate that drives asset pricing, but rather the entire term structure of interest rates (also referred to as the shape of the yield curve; we use these terms interchangeably).

Large depository institutions suchs as Bank of America, JP Morgan Chase and Citibank may benefit from rising rates when the shape of the Yield Curve becomes steep, i.e. when the difference between short term interest rates and long term interest rates is large.

Treasury Yield Curve Dynamics Historical graphs showing how the shape of the the yield curve changes over time.

The shape of the yield curve can further illustrate the liquidity premium demanded from investors for longer - term investments.

The shape of the yield curve can be a barometer for future growth, but its shape depends on a number of factors.

As such, its performance has less to do with stock prices and more to do with the shape of the yield curve.

There are practical limits on the shape of the yield curve:

I'm sorry, but with an overindebted economy, we can have a structural, not cyclical recession, where the shape of the yield curve doesn't matter much because of all the debt.

Regardless of the shape of the yield curve, there are reasons to consider investing in bonds.

The shape of the yield curve changes in accordance with the state of the economy.

A theory that tries to explain the shape of the yield curve.

The overall portfolio is constructed based on top - down, rather than bottom - up, selection, with the primary considerations being current interest rates, the shape of the yield curve, spreads between corporates and government bonds, and spreads between investment - grade and high - yield corporates.

However, it also depends on the shape of the yield curve.

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.

Another way of saying it is that we can learn more from the shape of the yield curve and credit spreads than by looking at backward - looking estimates of asset class returns.

, the yield curve needs to steepen by about 75 basis points from twos to tens before the lending margins of banks are no longer under pressure from the shape of the yield curve.

In this follow up note, we focus our attention on the shape of the yield curve and returns over various tightening cycles.

The shape of the yield curve gives an idea of future interest rate changes and economic activity.

This interest rate risk is primarily determined by the shape of the yield curve.

5) Regardless of the shape of the yield curve, for the reasons outlined in «Has The Fed Doomed Buy And Hold,» I believe the environment going forward is likely to favor more tactical strategies over buy and hold.

That said, my recent 2 - part series on the shape of the yield curve suggested that the curve shape was the sort where we often get negative surprises.

Summarizing, it still seems prudent to limit maturities to about 15 years, since absolute yields are still below levels that would make longer - term TIPS a compelling buy regardless of the shape of the yield curve.

If real rates rise well above the historical averages, you should consider locking in the higher yields for as long as possible, regardless of the shape of the yield curve.