The investor is also curious why the Treasury yield curve can have the two different shapes shown below. Identify the likely reasons underlying the two different shapes of yield curve and the information with regard to the future level of short rates and the state of the economy.

Treasury Yield Curve Treasury Yield Curve Yields as of 4:30 PM. Eastern time Yields as of 4:30 PM. Eastern time Percent Percent 6.07 5.0- 4.0- 3.0- 2.0- 1.0- 0+ 1 3 6 2 Months Year 5 10 30 Maturities 6.50 6.25 6.00 5.75 5.50 5.25 3 6 1 23 5 10 30 Months Year Maturities