Industry Update
External Article22 February 2011

The interest rate yield curve

By Joel Ross , President at Citadel Realty Advisors

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The yield curve is the plot of the rates as you go out by maturity. The left side is the short rates (i.e. one month) and the right is the long rates (i.e. 30 years). The slope of this curve has been fairly good at predicting where rates are headed over the next few months and the cost of borrowing. Typically, as the economy improves and there is a growing sense of inflation, the yield curve steepens to reflect investors’ belief that a higher return is needed as you go further out in time to compensate for money being in a bond and inflation rising.

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Joel Ross

Joel Ross is principal of Citadel Realty Advisors, successor to Ross Properties, the investment banking and real estate financing firm he launched in 1981. A Wharton School graduate, Ross began his career on Wall Street as an investment banker in 1965. A pioneer in commercial mortgage-backed securities, Ross, along with Lexington Mortgage, and in conjunction with Nomura, effectively reopened Wall Street to the hotel industry.

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