Curve Flattening
A yield-curve move where the SLOPE decreases -- typically short-end rates rising (or falling less) while long-end rates rise less (or fall more). Flattening commonly accompanies Fed hiking cycles (the policy rate drives the short end up while long-end inflation expectations anchor the long end). Sustained flattening sometimes culminates in an INVERSION where short-end exceeds long-end, a historically reliable but imprecise recession signal. A barbell portfolio is hurt by flattening; a bullet concentrated mid-curve is also hurt but typically less so.
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Related terms
10Y Treasury · Altman Z-Score · Asset Sensitivity · Basel III · Bond ETF · Bretton Woods
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