Question on the Steepness or flattening of the Yield curve

CFA Level II Fixed Income
#1

Dear All

Please let me know if my understanding is correct:

  1. If the Short Term rates increases more than the rates on the longer term tenor, then it is Flattening of the Yield curve - due to level and steepness

  2. If the Short term rates decreases more than the rates on the Longer term tenor, then it is Steepening of the Yield curve due to level and Steepness

Please do let me know if the above is correct

Thanks

#2

Hello old friend - I agree with your description. I look at flattening as a clockwise rotation of the term structure and a steepening as a counterclockwise rotation (around some hypothetical center of mass for the term structure)

#3

Oh Brian, nice to meet you here. I could never imagine :slightly_smiling_face:

Regards

Mani Venkataramanan (QuantMan2318)

#4

I wish this forum was as effective as the Bionic Turtle forum…just not the same