Staying ahead of the Yield Curve

Registration for this is event is closed.

Date:  Tuesday, May 22, 2018
Time:  Reception: 6 p.m. (Light fare will be served.)
Program: 6:30‑8 p.m.
Location: Federal Reserve Bank of St. Louis
One Federal Reserve Bank Plaza
Broadway and Locust St.
St. Louis, Mo. 63102 (map it)

Recently, there has been much talk about the yield curve, but what is it and why is it important?

The yield curve is a way to show the difference in the compensation investors are getting for choosing to buy short- or long-term U.S. Treasury debt. Typically, the yield curve slopes upward, which means the interest rates on longer-term debt—say, 10-year Treasuries—are higher than the interest rates on shorter-term debt—say, three-month Treasuries.

But on rare occasions, the yield curve inverts: That is, it shows higher interest rates for short-term debt than for long-term debt. An inverted yield curve is sometimes viewed as a predictor of an economic slowdown or recession. Since the Federal Open Market Committee (FOMC) began raising its policy rate in December 2015, the spread between short- and long-term interest rates has narrowed, with the yield curve flattening, but not inverting.

Economist Chris Waller, director of research at the St. Louis Fed, will discuss what the yield curve looks like now and what it is telling us. Will long-term rates keep pace with projected increases in the policy rate, given the still-positive outlook for the economy? Or is the yield curve at risk of flattening further?

David Wheelock, group vice president and deputy director of research, will give a welcome and introduction. He and Waller also will participate in a Q&A session with Senior Economist Fernando Martin after Waller’s presentation.

The event is open on a first-come, first-served basis. There is no cost to attend, but registration is required and will close May 21 or as soon as all seats are filled.

Questions? Contact Karen Casbourne at Karen.Casbourne@stls.frb.org or 314-444-7471.

This presentation is part of the St. Louis Fed’s evening discussion series, called Dialogue with the Fed: Beyond Today’s Financial Headlines. View previous presentations at this site.