![]() In butterfly shifts, the magnitude of change in the yield of short-term (BIL) and long-term (TLT) bonds is higher or lower than the magnitude of change for intermediate-term (IEF) bonds. When the different between yields of short-term (BIL) and long-term (TLT) bonds decrease, we call the change a “flattening of the curve.” On the contrary, when the difference increases, we call it a “steepening of the curve.” In flattening and steepening, the yields across maturities don’t change by equal magnitudes.Īnother type of shift is the change in the curvature of the yield curve. ![]() When they change by the same magnitude across maturities, we call the change a “parallel shift.” When they change in different magnitudes across maturities, we call the change a “non-parallel twist or shift.” ![]()
0 Comments
Leave a Reply. |