AuthorTopic: yield curve
kevin
@2010-05-28 08:37:10
Hey, I have a problem regarding flattenning yield curve. An review question is confusing me. To get the answer correct you should know that flattening yield curve indicates rising short term interest rates. I have always believed the opposite? It would be nice if someone could advise me on this. Thanks
tony1973
@2010-05-31 07:08:37
in an upward sloping ("normal") yield curve, just look at the slope. If it increases ("steepens") that means the long end rises and short end falls. A decreasing slope is called "flattening", to make the curve flat you must have long term rates falling and ***short term rates rising*** A simple graph would explain the answer more clearly.

CFA Discussion Topic: yield curve

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