Capital Economics' Asia markets chief Thomas Matthews said that although term
premium has risen recently, most major government bond yield curves are unlikely
to steepen materially over the medium term. He added the recent sell-off has
eased and curves remain flat by historical standards, including in fiscally
stressed France. Investors expect the average federal funds rate over the next
two years to be roughly in line with the average over the subsequent eight
years, making a large steepening via that channel unlikely.
