Since last month, interest rates have risen across the board, with a surge in long rates steepening the yield curve. The 3-year, 3-month spread has increased from 70 to 102 basis points, finally moving above its long-run average of 80 basis points. Rates have shown an even larger change since the beginning of the year, with the 30-year rate rising 95 basis points since January. Many press accounts attribute these moves to expectations of Fed tightening, though Fed rate hikes generally flatten the yield curve, as long rates rise less than short rates.
Suggested citation: "Interest Rates," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-07, pp. 06, 07.01.1999.