Figure 5.7 shows a number of yield curves at various points in time. Go to www.treasury.gov, and in the "Resource Center" at the top of the page click on "Data and Charts Center." Find the Treasury yield curve. Does the current yield curve fall above or below the most recent one listed in Figure 5.7? Is the current yield curve flatter or steeper than the most recent one reported in Figure 5.7?

short-term interest rates were expected to decline sharply in the future. For longer-tenn interest rates with their positive liquidity premium to be well below me short-term interest rate, short-term interest rates must be expected to decline so sharply that their average is far below the current short-term rate. Indeed, the public's expectations of sharply lower short-term interest rates evident in the yield curve were realized soon after January 15; by March, three-month Treasury bill rates had declined from the 16% level to 13%. Interest Rate {95] 1B 14 tL- January 15. 1931 12 March Elli 1935 May 16. 1930 1D (3" March 3. 199? s //_e 9__ May. 291B 2 P/ / (Lllll 0 1 2 3 4 5 5 10 15 20 Terms to Maturity [Years] Figure 5.? Yield |lituntes for U.S. Government Bonds Yield curves for US. government bonds for different dates from 1981 to 2016