Yield curve regimes
How to classify inversion, flattening, and re-steepening without losing the growth, inflation, and policy context.
Summary
A curve spread says less than the path of both legs. Classifying the move as bull or bear steepening or flattening gives the change an economic interpretation.
Why it matters
The same 2s10s slope can reflect very different policy, inflation, and growth expectations. Portfolio implications depend on how the curve arrived there.
What to watch
2s10s and 3m10y slopes
Front-end policy repricing
Term premium
Real yields and breakevens
Research workflow
- 01Name the curve state
- 02Decompose the leg moves
- 03Connect to the policy and inflation regime
- 04Confirm through banks, credit, duration, and FX