The yield curve on U.S. Treasuries has flattened noticeably since last month, with long rates falling but short rates remaining steady. Among the closely watched spreads, the 3-year, 3-month spread has dropped to 59 basis points, below its 30-year average of 80 basis points, and the 10-year, 3-month spread has fallen to 96 basis points, below its average of 120. The flattening of the 10-year, 3-month spread also portends a slowdown (though not a recession) in real economic growth.
Suggested citation: “Interest Rates,” Federal Reserve Bank of Cleveland, Economic Trends, no. 96-12, pp. 05, 12.01.1996.