quick yield curve position question

Hi, i have some quick questions about yield curve positioning.

  1. when we expect a yield curve to flatten,does it mean that the yield spread between the long term rates and short term rates is expected to decline, and a bond investor would short the shorter term bonds and long the longer term bonds?

2)when we expect the yield curve to steepen,would a bond investor long the shorter maturity bond /short the longer maturtiy bonds?


sounds right to me…


It is correct when the yeild curve is steep up or short term < long term rate. What happen if the curve is steep down or short term rate > long term rate :slight_smile: ?