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Description:Although published swap rates are often used as constant maturity rates, the most popular constant maturity rates are yields on two-year to five-year sovereign debt. In general, a flattening or an inversion of the yield curve after the swap is in place will improve the constant maturity rate payer's position relative to a floating rate payer. In this scenario, long-term rates decline relative to short-term rates. While the relative positions of a constant maturity rate payer and a fixed rate payer are more complex, generally the fixed rate payer in any swap will benefit primarily from an upward shift of the yield curve. The spread between two CMS rates e.
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