Yield Curve Flattening

"A brilliant man would find a way not to fight a war."
--Admiral Isoroku Yamamoto (Pearl Harbor)

With long bond rates collapsing over the past few days, and short rates steadily rising over the past year or so, the yield curve is flattening--and right quick. The difference between Twos...

...and Tens...

...stands at about 10 bips.

Because they reduce the attractiveness of carry trades, flattening yield curves are rarely construed as bullish in leveraged economies.

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