One could argue that a flat yield curve will force banks to make more and riskier loans.
In other words, a flat yield curve has the potential to chase investors from equities into bonds.
Major banks like JPMorgan Chase, Citigroup and Bank of America are long sufferers from the flat yield curve curse.
We expect a nearly flat yield curve over the next few years.
Savings and loan institutions, recent victims of the flat yield curve with huge redemptions in outstanding fixed-mortgage paper, will be able to operate at wider spreads.
Historically, a flat yield curve is negative for the economy.
With a flat bond yield curve and oil quots moving lower, the oils are in for a tough year.
By keeping the yield curve flat, QE2 pressures banks to make more higher-return loans as investing in treasuries and short-term facilities provides a lower and lower profit margin.
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This would keep the yield curve relatively flat or mildly inverted as the Fed resumes hiking.
Important markets tops come with a handful of key ingredients, including high valuations, a lot of optimism, and a treasury yield curve that is flat or even inverted.
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That is one reason why the yield curve has stayed pretty flat despite the Fed's repeated tightening of short-term rates.
If you want to play the flattening yield curve, consider buying FLAT.
Essentially, that means FLAT is a leveraged play on the yield curve.
When the yield curve is inverted or relatively flat, it is a sign that investors are so afraid of future economic weakness that they are willing to take low interest rates on long-term holdings for fear that returns will become even less attractive later on.
To exploit a flattening yield curve in a touchy investment environment, go with FLAT.
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