What is 'Bear Flattener'
Bear flattener is a yieldrate environment in which shortterm interest rates are increasing at a faster rate than longterm interest rates. This causes the yield curve to flatten as shortterm and longterm rates start to converge.
BREAKING DOWN 'Bear Flattener'
At any time, the yield curve is either in a state of steepening or flattening. These fluctuations occur due to investor demand, change in interest rates, and institutional investors trading large blocks of fixedincome securities.
If the curve is flattening, the spread between longterm rates and shortterm rates is narrowing. A bear flattener often occurs when the government raises interest rates in the short term. Increasing interest rates drives shortterm bond prices down, increasing their yields rapidly in the short term, relative to longterm securities.

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