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US yield curve now steeper than most developed countries

By Sober Look

The treasury yield curve remains quite steep by historical standards. Typically such steepness is driven by expectations of higher inflation in the future. But as discussed earlier, that is not the case in the US (see post). Instead it is the expectation of the Fed’s “taper” that has been influencing the shape of the curve. Measured as the difference between the 10-year and the 1-year yield, the US curve is now steeper than those in most developed economies, including Canada, Germany, France, the UK, Japan, and Australia.

The only developed economies with steeper government curves are in the Eurozone periphery – the result of lingering credit concerns.

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Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, banking, asset management, risk management, derivatives, global economy, policy, and regulation, with the emphasis on finance education. Follow him on his blog or twitter.