Bull Steepener

DEFINITION of 'Bull Steepener'

A change in the yield curve caused by short-term rates falling faster than long-term rates, resulting in a higher spread between the two rates.

BREAKING DOWN 'Bull Steepener'

A steepener differs from a flattener in that a steepener widens the yield curve while a flattener causes long-term and short-term rates to move closer together. When the yield curve is said to be a bull steepener it means that the higher spread is caused by the short-term rates, not long-term rates.

RELATED TERMS
  1. Bear Steepener

    A widening of the yield curve caused by long-term rates increasing ...
  2. Yield Curve Risk

    The risk of experiencing an adverse shift in market interest ...
  3. Bull Flattener

    A yield-rate environment in which long-term rates are decreasing ...
  4. Bear Flattener

    A yield-rate environment in which short-term interest rates are ...
  5. Curve Steepener Trade

    A strategy that uses derivatives to benefit from escalating yield ...
  6. Flat Yield Curve

    A yield curve in which there is little difference between short-term ...
Related Articles
  1. Professionals

    Yield Curve Risk

    CFA Level 1 - Yield Curve Risk. Learn how yield curve risk can affect your bond portfolio and how the various shifts in the yield curve relate to interest-rate risk.
  2. Professionals

    Yield Curves

    CFA Level 1 - Yield Curves. Learn how governments can influence short and long-term interest rates. Discusses the various shapes of yield curves and how they are formed.
  3. Bonds & Fixed Income

    The Impact Of An Inverted Yield Curve

    Find out what happens when short-term interest rates exceed long-term rates.
  4. Investing Basics

    Understanding the Inverted Yield Curve

    An inverted yield curve occurs during the rare times when short-term interest rates are higher than long-term interest rates.
  5. Professionals

    Yield Curves

    FINRA/NASAA Series 65: Section 8 Yield Curves. In this section normal, inverted and flat yield curves and yield spreads.
  6. Investing

    Trade Bond ETFs Using Yield Curves

    Different types of yield curves provide important insights for trading bond-based securities.
  7. Term

    Understanding Interest Rates Inflation And The Bond Market

    Interest rates, bond yields and inflation expectations are all correlated.
  8. Professionals

    Yield Curve

    Yield Curve
  9. Bonds & Fixed Income

    Advanced Bond Concepts: Term Structure of Interest Rates

    The term structure of interest rates, also known as the yield curve, is a very common bond valuation method. Constructed by graphing the yield to maturities and the respective maturity dates ...
  10. Fundamental Analysis

    Understanding Term Structure of Interest Rates

    The term structure of interest rates is a common method of valuing bonds.
RELATED FAQS
  1. Why are the term structure of interest rates indicative of future interest rates?

    Learn why economists believe the term structure for interest rates reflects investor expectations for future interest rates ... Read Answer >>
  2. How can the yield curve help me make investment decisions?

    Learn about the yield curve, and discover why this chart is an important economic indicator. How do Treasury bond yields ... Read Answer >>
  3. What is the current yield curve and why is it important?

    Understand what the current yield curve represents, and learn how market analysts commonly interpret various changes in the ... Read Answer >>
  4. What is the difference between term structure and a yield curve?

    Understand the difference between the term structure of interest rates and a yield curve, if any. Learn what the yield curve ... Read Answer >>
  5. What does the yield curve actually predict?

    Find out what an inverted yield curve represents, how it has performed as a leading indicator and why it appears to hold ... Read Answer >>
  6. What are the different formations of yield curves?

    Find out more about the yield curve and yield curve formations, what yield curves measure and the three main types of yield ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center