What is it?
The graph you get when you plot the rates for 1-month T-Bills to 30-year T-Bonds.
When people think about interest rate changes, they generally are discussing a parallel change in interest rates, where rates change by the same amount across the yield curve.
When yield curve changes are discussed from a bearish or bullish standpoint...
Rising rates are considered bearish.
Falling rates are considered bullish.
Non-parallel shifts are generally discussed as yield curve twists.
The shape of the yield curve is simply the difference in yield between two maturities. The "rule of thumb" is to look at the 2-year to 10-year Treasury curve slope. If the 10-year rate less the 2-year rate is positive, the yield curve is normal, or positively sloped. If it were negative, it is called an inverted yield curve. If the difference is relatively small, it's considered flat.
Non-parallel shifts
Steepeners... when the difference between the long end & the short end increases
Bull steepener... short interest rates are falling faster than long rates
Bear steepener... long rates are rising faster than short rates.
Flatteners... when the difference between the long & short end decreases
Bull flattener... long interest rates are falling faster than short rates
Bear flattener... short rates rise faster than long rates
