What a difference a year makes! One year ago, financial markets were still reeling from the Asian crisis, the Russian default, the collapse of Long Term Capital Management, and the associated flight to quality and liquidity. The Treasury yield curve has moved from a position of short-rate inversion with a 10-year, 3-month spread of only seven basis points (bp) to a more normal, upward-sloping shape with a 10-year, 3-month spread of 104 bp, just below the historical average of 120 bp.
Suggested citation: "Interest Rates," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-10, pp. 06, 10.01.1999.