Yield Curve Flattening
Yield curve flattening is the narrowing of the yield spread between shorter- and longer-term bonds of the same credit quality, typically measured by the difference between short- and long-maturity U.S. Treasuries (for example, the 2-year vs 10-year).
Example: During a period of shifting policy expectations, the 2-year yield rose while the 10-year yield remained steady or fell, contributing to yield curve flattening.
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