All along the maturity spectrum, interest rates have moved lower in the past month. Longer rates fell the most, however, producing a noticeable flattening of the yield curve. The 3-year, 3-month spread, for example, dropped from 41 basis points to 2 basis points because the 3-year rate fell 43 basis points and the 3- month rate dropped only 4 basis points. Likewise, the 10-year, 3- month spread dropped from 43 to 17 basis points. Some analysts have ascribed these lower rates to a flight to quality, as investors became worried about both domestic and foreign investments.
Suggested citation: “Interest Rates,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-09, pp. 05, 09.01.1998.