Head of North American Investment Strategy & Research
Insight of the Week
Earlier this year we witnessed the steepest yield curve inversion over the last few decades, but since then the slope of the yield curve has begun to steepen.
There are generally two ways in which yield curves steepen: 1) bull steepening and 2) bear steepening. Bull steepening occurs when short term rates fall faster than long term rates. This is termed “bull” because of the positive returns experienced while short term rates fall. Bear steepening occurs when long term rates rise faster than short term rates. The term “bear” is due to the negative returns from a rising long term rate.
Recently, we have experienced the bear steepening variety