If the yield curve is upward sloping, then short-term debt will be cheaper than long-term debt.Thus, if a firm's CFO expects the yield curve to continue to have an upward slope, this would tend to cause the current ratio to be relatively low, other things held constant.

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An upward sloping yield curve indicates that long-term interest rates are higher than short-term interest rates. This means that short-term debt will be cheaper for firms than long-term debt. Therefore, firms with an upward sloping yield curve tend to rely more on short-term debt to finance their operations, which would lower their current ratio (current assets divided by current liabilities).

If the Yield Curve Is Upward Sloping, Then Short-Term Debt