The expected increase in issuance reflects a higher projected budget deficit for fiscal year 2006 due in part to the commitment of the Federal government to assist in the redevelopment of the Gulf region devastated by Hurricanes Katrina and Rita.

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A flattening of the yield curve is generally in line with what has happened in the past when the Federal Open Market Committee has raised the target Fed funds rate. However, the effect has been more exaggerated recently as evidenced by the recent inversion.

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