The slope of the yield curve no longer reacts to its usual determinants

We look at the United States, the euro zone and Japan. Explicitly or implicitly, central banks in these countries have begun to control nominal long-term interest rates (“yield curve control”). It is important to understand that this eliminates the link between the slope of the yield curve and its usual determinants: Expected inflation; Public debt (or fiscal deficits). When drawing up forecasts of long-term interest rates, we should not forget that the link between the slope of the yield curve and its fundamental determinants has disappeared - or at least become considerably weaker .