Treasury Yield Curve Analysis

The 30-year Treasury yield fell to 4.82 percent on Friday, down from 4.86 percent at the same time last week. This represents a modest decline for the longest maturity, continuing a pattern of relative stability at the long end of the market. The yield has remained in a narrow range over the past several sessions, hovering just below the 5 percent threshold that has capped trading in recent months.

The broader yield curve showed mostly lower rates compared to last week, with notable declines at the longer maturities. The 20-year yield dropped to 4.76 percent from 4.81 percent a week earlier, while the 10-year rate edged down to 4.18 percent from 4.19 percent. Short-term rates were mixed, with the 6-week and 2-month tenors unchanged or slightly lower, while the 1-year rate rose to 3.52 percent from 3.47 percent. The 2-year yield moved higher to 3.54 percent compared to 3.47 percent last Friday.

Looking back over the past month, the curve has shifted in a distinctive pattern with short-term rates declining while longer maturities climbed. The 3-month rate fell to 3.62 percent from 3.88 percent one month ago, a significant drop at the front end. The 1-year rate declined to 3.52 percent from 3.61 percent over the same span. In contrast, the 10-year yield climbed to 4.18 percent from 4.02 percent, and the 5-year rate rose to 3.75 percent from 3.59 percent. The 2-year rate edged up to 3.54 percent from 3.47 percent, showing a smaller move than the middle part of the curve.

The curve has steepened notably over the past month as the gap between short and long rates widened. A month ago, the spread between the 2-year and 10-year was about 55 basis points, and today it stands at roughly 64 basis points. The 2-year rate now sits below the 10-year, maintaining the normal upward slope across that segment of the curve. The shortest maturities remain inverted relative to the 3-month rate, though that inversion has narrowed from a month earlier. Overall, the curve has shifted higher at the long end while declining at the short end, creating a more pronounced upward tilt from the front to the back.