Since last month, the yield curve has shifted upward and marginally decreased its upward tilt. The 3-month Treasury-bill rate moved up 31 basis points (bp), from 4.82% to 5.13%, while the 3-year, 3-month spread flattened from 93 to 85 bp, echoing the dip from 110 to 105 bp in the 10-year, 3-month spread. These spreads stand near their respective long-run averages of 80 and 125 bp. To the (admittedly somewhat limited) extent that such a shift expresses changes in market sentiments about inflation, it indicates a mild increase in concern, concentrated more on the short run. To the extent (also limited) that it reflects real factors, it indicates moderate real growth for the next year.
Suggested citation: "Interest Rates," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-11, pp. 06, 11.01.1999.