Friday 29 May 2009

The shape of the interest rate curve

Security KAG has created a chart of the US Yield curve describing how the spread between rates of 3 months, 5 years and 30 years are developing since 1991. The yield curve went almost flat in 2006. That was the time to set up a steepener. Now we’re on our way back to flattening.
Well… we all could have been rich by following this chart.

Flattening was the case until recently.
The long term interest rates of US Treasuries are rising and prices imploding.



We can make the same exercise for Europe.


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