If SHY is rising and TLT is falling in value, the yield curve is steepening.
With the yield curve as steep as ever, this bank's gross profit on lending will expand.
The most important indicator is the Treasury yield curve, which is still very steeply sloped.
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What could be worse than the Fed's flattening the yield curve and stoking 1970s-style inflation?
This would keep the yield curve relatively flat or mildly inverted as the Fed resumes hiking.
So much for the idea of a flattening yield curve bringing investors to the risk table.
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The rationale is that once interest rates begin moving upwards, the yield curve will flatten.
Apart from the one-time false positive, the yield curve signal has another weakness fuzzy timing.
To exploit a flattening yield curve in a touchy investment environment, go with FLAT.
Real interest rates are negative going out 10 years on the Treasury bond yield curve.
So when the yield curve is steeper, banks have a fatter future gross operating profit margin.
By 2014, yield curve dynamics at JPMorgan could add a buck a share to profits.
We are surely on the eve of a rising yield curve, maybe steeply angled.
Right now, we have a normal yield curve, with interest rates rising with length of maturity.
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Currently, the Treasury yield curve ranges from 0.11% for 3-month T-bills, to 2.85% for 30-year T-bonds.
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For now, the historical euro risk-averse sanctuary remains at the very short-end of the German yield curve.
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Federal Reserve Chairman Ben S. Bernanke is paying interest on reserves and has flattened the yield curve.
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.
Normally, tightening FRB policy emphasis pushes up interest rates all along the yield curve, bearish for equities.
As the muni yield curve steepens investors will start interpreting that steepening as a reflection of increased risk.
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The Fed has flattened the yield curve, which narrows profit margins on the next loan a bank makes.
There is an easier way to play the yield curve levitation I see coming, namely the banking sector.
The slope of the yield curve, singularly, is a long-time, powerful leading economic indicator the steeper the more positive.
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Assume Alan Greenspan is through tightening and the yield curve turns more positive.
The pledge of aggressive buying has caused Japanese Government Bonds (JGB) to rally violently and flatten their yield curve.
If SHY is falling and TLT is rising, the yield curve is flattening.
That U.S. rates must rise, at least at the short end of the yield curve, is a foregone conclusion.
Institutions are also nervous, as very short-term T-bill rates have spiked, therefore causing the yield curve to flatten out.
Treasury yields have been going down along the entire yield curve since 1983.
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