Treasury Yield Curve Analysis

The 30-year Treasury yield finished at 4.85 percent Monday, up from 4.80 percent a week ago. The shorter end of the curve told a different story, with the 4-week rate falling to 3.71 percent from 3.69 percent last Monday, while the 6-week actually dropped to 3.68 percent from 3.70 percent a week earlier. Bills out to six months all moved lower, with the 3-month sliding to 3.64 percent and the 6-month to 3.57 percent. The front end softened while longer maturities strengthened, creating a clear divide between short-term and long-term rate movements.

The broader curve showed a classic bull steepener pattern. Yields from the 2-year on out moved higher, with the 2-year reaching 3.46 percent, the 3-year at 3.53 percent, and the 5-year climbing to 3.71 percent. The 10-year sat at 4.17 percent while the 20-year reached 4.79 percent. The one-year was essentially flat at 3.47 percent compared to 3.48 percent last Monday. Every maturity from the 2-year through the 30-year ended the day higher than where they finished a week ago, showing a broad upward shift in the belly and long end of the curve.

Looking back one month to late November, the short end has come in dramatically. The 4-week fell from 4.03 percent to 3.71 percent, the 3-month dropped from 3.91 percent to 3.64 percent, and the 6-month slid from 3.76 percent to 3.57 percent. The one-year moved from 3.61 percent to 3.47 percent. Notably, the 2-year has barely budged, sitting at 3.46 percent both then and now. From the 3-year through the 30-year, rates are higher than they were a month ago, with the 10-year climbing from 4.04 percent to 4.17 percent and the 30-year rising from 4.68 percent to 4.85 percent.

The curve continues to show a positive slope across all maturities with no inversions present. The 2-year to 10-year spread has widened to 0.71 percentage point from 0.66 percentage point a month ago. The 10-year to 30-year spread sits at 0.68 percentage point, roughly unchanged from recent weeks. Short rates are lower than they were a month ago while long rates are higher, causing the curve to steepen. The front end is anchored by relatively stable short-term rates while the long end has been pushed higher by sustained pressure at the longer maturities over the past 30 days.