A quote from Bloomberg news October 6, 2013: "The yield on 10-year U.S. bonds dropped to a two-month low of 2.58 percent on Oct. 3, after Treasury Secretary Jacob J. Lew said the government won't be able to pay its debts in 14 days unless Congress raises the $16.7 trillion borrowing ceiling. While short-term bill rates and the cost to insure against a default have risen, volatility in Treasuries has fallen."

Q: Does this situation reflect a steepening or flattening of the Treasury yield curve and how can you tell?

Answer rating: 100% (QA)

The scenario described suggests a steepening of the Treasury yi... View the full answer