Curve Flattening
Long-term rates fall relative to short-term rates.
A flattening yield curve occurs when the spread between long-term and short-term rates decreases. This can happen through a 'bear flattener' (short rates rise faster) or a 'bull flattener' (long rates fall faster). Persistent flattening may signal economic slowdown expectations or tightening monetary policy.
Related Terms
Curve Steepening
Long-term rates rise relative to short-term rates.
Key Rate Duration
Sensitivity to rate changes at specific maturity points on the curve.
DV01
Dollar change in value for a 1 basis point (0.01%) yield move.
CS01
Dollar change in value for a 1 basis point move in credit spread.
Macaulay Duration
The weighted average time (in years) to receive the bond's cash flows.
Modified Duration
Measures the percentage price change for a 1% yield change.