Talking Data – What is the Yield Curve Telling Us?

In the latest installment of Talking Data, Jim discusses what the yield curve is telling us.

• The four states of the yield curve Which states are we in now and what does it mean
• Inconsistent/mixed messages from the Fed
• The yield curve has four states:
• Bull Flattener = Falling rates and a flattening yield curve. This means the two-year yield is falling slower than the ten-year yield.
• Bull Steepener = Falling rates and a steepening yield curve. This means the ten-year yield is falling slower than the two-year yield.
• Bear Flattener = Rising rates and a flattening yield curve. This means the two-year yield is rising faster than the ten-year yield.
• Bear Steepener = Rising rates and a steepening yield curve. This means the ten-year yield is rising faster than the two-year yield.

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The graphics below were used in the discussion.