Treasury Yield Curve Analysis

The 30-year Treasury yield rose to 4.86 percent Tuesday, up from 4.81 percent a week ago. This marks the highest level for the longest maturity since late November. The 10-year yield also climbed to 4.18 percent compared to 4.14 percent last Tuesday. The recent push higher in long-term rates comes after a brief pause last week when yields edged lower across the board.

The middle and longer portions of the curve moved higher over the past week while short-term rates were mixed. The 7-year yield reached 3.93 percent and the 5-year rose to 3.72 percent, both up about 4 from last Tuesday. The 2-year ticked up to 3.47 percent from 3.45 percent. However, the 3-month rate dipped slightly to 3.63 percent and the 6-month fell to 3.56 percent. The short end shows some stability with the 4-week rate at 3.7 percent, little changed from last week.

Looking back a month to late November, the curve has shifted dramatically higher at the long end while the short end has fallen sharply. The 30-year is now 19 higher than it was a month ago, jumping from 4.67 to 4.86 percent. The 10-year has climbed 17 in that span to 4.18 percent. The 5-year rate has risen 17 from 3.55 percent. However, the 4-week yield has dropped 34 compared to a month ago, falling from 4.04 to 3.7 percent. The 3-month rate is down 27 over the past month. Even the 2-year has declined slightly over 30 days, dropping from 3.43 to 3.47 percent.

The curve remains steeply upward sloping but has changed shape compared to both last week and a month ago. The spread between 30-year and 3-month yields widened further to about 123, up from 116 last week and far above the near-flat reading of just 2 seen 30 days ago. The 2-year to 10-year spread remains inverted at roughly 71, similar to last week and a month ago. A month ago the 2-year was actually above the 10-year, so the inversion has persisted but the middle of the curve has seen the biggest shifts over the past month.