# Regimes Source: https://www.yieldcurve.pro/regimes This app allows users to see which market regime exists as of the selected date. The regime is a result of movements in yields as measured by the Level and Slope components of the yield curve. The components of the yield curve — Level and Slope — follow the framework of Litterman and Scheinkman (1991) and account for the vast majority of historical yield curve variation. This app uses the following proxy definitions: * **Level** = 10 Yr (the general level of rates across the curve) * **Slope** = 10 Yr − 3 Mo (the spread between long and short rates) The possible regimes are * **Bull Steep** - Level and Slope decreasing and increasing, respectively, characterized by short-term rates falling faster than long-term rates * **Bull Flat** - Level and Slope both decreasing, characterized by long-term rates falling faster than short-term rates * **Bear Steep** - Level and Slope both increasing, characterized by long-term rates rising faster than short-term rates * **Bear Flat** - Level and Slope increasing and decreasing, respectively, characterized by short-term rates rising faster than long-term rates. * **Consolidation** - Either the change in Level or Slope is below 5 bps over the lookback window, indicating no clear directional signal. Changes in Level and Slope are computed relative to a lookback window. The system default is 251 market days. ## Instructions * choose the desired **Start** and **End** dates using the two date selectors — the chart updates automatically * choose the desired **Long Tenor** and **Short Tenor** from the dropdown menus * click the **sparkle** button to open **ChatYCP** and ask questions about the data (login required) ## Notes * **Start** and **End** are pre-populated with the earliest and latest dates available, respectively * **Long Tenor**, **Short Tenor**, and **Lookback** are pre-populated with system defaults (10 Yr, 3 Mo, and 251 days, respectively). Logged-in users can change these via [Account Defaults](https://www.yieldcurve.pro/about#header_defaults) * try asking ChatYCP: *"What is the current yield curve regime?"* or *"How many regime transitions occurred in 2024?"* Use Cases * selecting the best asset classes for a given regime * risk management and hedging * economic analysis and forecasting Further Reading * Litterman & Scheinkman (1991) — Common Factors Affecting Bond Returns * Factors in Focus: Are Your Equity Styles Ahead of the Curve? * Foundations in Factors * Bears, Bulls, Steepeners, Flatteners, Oh My! * Asset Returns During Various Yield Curve Regimes * Does The Yield Curve Follow a Cycle?