Flat Yield Curve
Definition of 'Flat Yield Curve'A yield curve in which there is little difference between short-term and long-term rates for bonds of the same credit quality. This type of yield curve is often seen during transitions between normal and inverted curves.![]() |
|
Investopedia explains 'Flat Yield Curve'When short- and long-term bonds are offering equivalent yields, there is usually little benefit in holding the longer-term instruments - that is, the investor does not gain any excess compensation for the risks associated with holding longer-term securities. For example, a flat yield curve on U.S. Treasury would be one in which the yield on a two-year bond is 5% and the yield on a 30-year bond is 5.1%. |
|
Related Definitions
Articles Of Interest
-
Yield Curve
Learn more about how this curve is used to predict changes in economic output and growth. -
Analyzing A Bank's Financial Statements
A careful review of a bank's financial statements can help you identify key factors in a potential investment. -
The Impact Of An Inverted Yield Curve
Find out what happens when short-term interest rates exceed long-term rates. -
Bond Spreads: A Leading Indicator For Forex
Here we examine some telling patterns in the relation between countries' interest rates and their currency pairs. -
Interest Rates And Your Bond Investments
By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it. -
Analyzing The Best Retirement Plans And Investment Options
Understanding the various retirement investments - from annuities to 401(k)s and everything in between - is crucial to reaching your retirement goals. Here, we examined many of the popular investments ... -
Zero-Coupon Bond
A zero-coupon bond or ‘no coupon’ bond is one that does not disburse regular interest payments. Instead, the investor buys the bond at a steep discount price; that is, at a price ... -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government. -
Climb The Bond Ladder To Higher Income
Whether it's learning how to ladder bonds or finding alternatives, investors seeking better returns need to be more active. -
6 Popular ETF Types For Your Portfolio
Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods.

Free Annual Reports