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The addition of market makers in CBOT swap futures may have come just in time for a contract that may be poised to underperform Treasury futures. While it may be frustrating, there is nothing unusual about the slope of the Treasury curve losing all momentum toward the end of a tightening cycle, as the economy slows. As the expansion wears on, inflation pressures typically appear contained and, as Figure 1 illustrates, most of the recent business cycles have shown similar patterns where the curve not only has very little slope, but also was grinding sideways for several quarters until the peak of the expansion was reached.
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