The Twisting Yield Curve
Despite the recent market recovery, interest rates are still quite low. The yield on the 10-year Treasury had risen above 3.2% as recently as last November, but is now hovering around 2.6%. As a result, the yield curve has “twisted” over the past year, with short-term rates rising and long-term rates falling.
What’s a Flattening Yield Curve?
What is a yield curve, and more importantly, why are stock investors interested in its shape? A yield curve gives a snapshot of how yields vary across bonds of similar credit quality, but different maturities, at a specific point in time.