Those expectations of a flatter yield curve show analysts remain cautious about long-term economic growth.

Put it together, and the net effect is a bet on a flatter yield curve.

The flatter yield curve reflects traders' view of rising short-term rates and long-term inflation staying tame.

It has combined positions that would benefit from a flatter yield curve with investments in inflation-linked local bonds.

At the same time, the Fed will raise their borrowing costs -in other words a flatter yield curve will reduce earnings.

The BIS said banks may face higher borrowing costs as they compete with governments for funding and because of flatter yield curves.