CHICAGO (Bloomberg) ? The cost of insuring payments on bonds sold by financial and industrial companies may rise if yields on ten-year Treasury notes don?t keep pace with Federal Reserve rate increases, according to Bianco Research LLC.

A measure of the gap between two-year and ten-year Treasury yields, also known as the yield curve, has been ?the most robust descriptor? of fluctuations in financial and industrial credit default swaps prices since May, 2003, Bianco strategist Howard L. Simons said in a research note dated August 23.

Credit-default swap costs for financial and industrial borrowers ?are going to rise in an economy where the yield curve is flattening and the Fed is driving the short end higher?, Chicago-based Simons said without citing specific companies.

When the gap, or spread, between two- and ten-year Treasuries narrows, the yield curve is said to flatten. The spread was 13 basis points at 11.55 a.m. in New York on Friday, compared with 197 basis points before the Fed?s 10 quarter-percentage-point interest rate increases. The spread has averaged 117 basis points over the past five years. A basis point is 0.01 percentage point. Credit-default swaps are the fastest-growing part of the $8 trillion credit-derivatives market. The contracts allow investors to bet on a company?s creditworthiness or protect against a default.