If we say a yield curve will steepen and we are not given any information that highlights how it will steepen is the default assumption that the ST rates will fall and LT bonds will rise?
i.e do we always assume with Yield curve changes that it happens at both ends? A Y.C can still steepen with the short remaining unchanged and the long increasing for example.
Thanks
If the curve steepens, the short term rate falls while the long term rate rises.
If the curve inverts, the short term rate rises while the long term rate falls
Hope that helps.
It doesn’t have to happen at both ends.
I cant recall ever coming across that, can you please justify?
My reading is that it commonly is just the LT rates rising in one period
Actually, this is the true reflection of the statement:
If the yield curve steepens, the short term rate falls while the long term rate rises
However, because the bonds with long term duration are more sensitive to changes in the long term rate than bonds with short term durations, the interest rate effect of the long term duration bond dominates.
I am sure this is what you were referring to.
Sorry, so to confirm, unless otherwise stated do we assume a steepening is a falling of ST and rising of LT?
Correct
It doesn’t have to happen at both ends. A steepening of the yield curve means either front end rates rally or back end rates sell off (or of course both). The first case is called a bull steepener and the second a bear steepener. But both do not have to happen at the same time.
I should have just said this.
No worries, I got your back. I’m taking this nasty exam in June so answering these helps me too.
Which nasty exam is that?
Wouldn’t you like to know. 
You guys though
Mark it for yield curve invert
I think all of us including the magician missed one point . The OP said “usually”… and that is correct. Unless otherwise stated it is safe to assume steepening means lowering of ST yield while upping of LT yield.