Morgan Salaz is a fixed income analyst responsible for advising fixed income clients about bond trading opportunities. In the current recessionary environment, the level of government bond yields is low and the term structure is nearly flat. Salaz’s firm forecasts that after a brief recession, economic growth will return quickly during the coming 12 months.

Which of the following changes to the yield curve is consistent with Salaz’s expectation of increasing economic growth over the coming year?

A. Decrease in the level

B. Decrease in the term spread of long-term rates over short-term rates

C. Increase in the term spread of long-term rates over short-term rates