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U.S. Yield-Curve Steepening May Already Be Over

  • UniCredit strategists say recent curve steepening may be over
  • Aggresive long-term yield view needed for trend to continue
Trading On The Floor Of The NYSE As Big Tech Leads U.S. Stock Rally While Dollar Climbs
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The brief steepening of the U.S. yield curve may have already run its course, according to UniCredit SpA.

Investors would need to make “quite aggressive” assumptions on the level of future interest rates for the Treasury yield curve to enter into a protracted period where longer-term rates rise faster than shorter ones, strategists Kornelius Purps and Chiara Cremonesi wrote in a note Friday. Alternatively, they need to assume a sudden increase in the term premium -- the extra compensation demanded for holding longer-dated debt -- and both of those are unlikely, they said.