Business, Legal & Accounting Glossary
A flat yield curve has a small spread between short and long-term rates. The flat yield curve implies that the long-term rate is higher. If the short-term rate is higher, the yield curve is called an inverted yield curve rather than a flat yield curve. An arbitrary definition of a flat yield curve is a spread of 100 basis points between the short-term and long-term rates. In contrast to the flat yield curve, the normal yield curve is steeper. A flat yield curve may be a transition to an inverted yield curve. The inverted yield curve is of far greater interest, as since the 1960s it has been an almost perfectly reliable predictor of a US economic slowdown. Accordingly, speculation about a possible recession tends to be highest among bond traders during a flat yield curve.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Flat Yield Curve are sourced/syndicated and enhanced from:
This glossary post was last updated: 9th February, 2020 | 0 Views.