As 2000 closed, the yield curve was inverted, with a 3-year, 3-month spread of –78 basis points (bp) and a 10-year, 3-month spread of –74 bp. The inversion’s proximate cause was an increase in short rates combined with a decrease in long rates. The curve starts sloping upward again at five years, although 7-year yields continue to exceed adjacent maturities somewhat.
Suggested citation: "Interest Rates," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-01, pp. 07-08, 01.01.2001.