ABSTRACT
The model of the Treasury yield consists of two simultaneous Logit equations that have as their dependent variables the probabilities that a Treasury yield either rises or falls by more than a threshold amount. This chapter discusses the intermediate Treasury yields and to the slope of the Treasury-yield curve. When the curve is steep, it is somewhat more likely that intermediate rates will rise, causing the curve to flatten; and when the curve is flat, it is somewhat likelier that intermediate rates will fall, causing the curve to steepen. When gold has a positive trend, it is likely that intermediate rates will rise and equally unlikely that they will fall; and when gold is trending lower, the reverse is true. Monetary policy is not, however, seen to have anything like an equal tendency to cause intermediate rates to rise. The numerical value of Tilt is based on the strategic grid.
