Shrinky Dinks: The Yield Curve Edition

With long-term interest rates sinking, the slope of the yield curve is becoming increasingly more flat.  Given that short term interest rates are near zero, every decline in the long end of the curve causes the curve to flatten.  The spread between the yield on the 10-year and 3-month US Treasury has been shrinking rapidly in 2010.  After peaking out above 350 basis point (bps) in late 2009 and early 2010, today the spread broke down to its lowest level since January 2009.