Treasury Yield Curve Analysis

The 30-year Treasury yield came in at 4.83 percent on Tuesday, essentially unchanged from Monday's reading. That rate is 3 basis points lower than last Tuesday when it sat at 4.86 percent. The long end of the curve held relatively steady compared to the previous session, with the 20-year yield at 4.77 percent, one basis point below yesterday's level.

Short-term rates moved higher across the board compared to last week. The 2-year yield climbed to 3.53 percent from 3.47 percent a week earlier, a notable move for that maturity. The 1-year rate rose to 3.51 percent from 3.48 percent, while the 6-month yield increased to 3.59 percent from 3.56 percent. The shortest maturities also moved up, with the 4-week rate reaching 3.72 percent, two basis points higher than last Tuesday. Middle maturities showed more modest gains, with the 5-year at 3.75 percent and the 10-year holding steady at 4.18 percent compared to last week.

Looking back 30 days to early December, the curve has shifted significantly. Short-term rates have come down notably over the past month, with the 4-week rate dropping from 3.90 percent to its current 3.72 percent. The 3-month rate fell to 3.67 percent from 3.77 percent, and the 1-year rate declined from 3.59 percent to 3.51 percent. In contrast, longer-term rates have moved higher. The 5-year rose from 3.66 percent to 3.75 percent, the 10-year climbed from 4.09 percent to 4.18 percent, and the 30-year increased from 4.74 percent to 4.83 percent. The middle portion of the curve shows a mixed picture, with the 2-year and 3-year slightly higher than their levels from a month ago.

The Treasury yield curve remains upward sloping but with some notable characteristics. The spread between the 2-year and 10-year has widened compared to last week, moving from around 0.71 to 0.65 percentage points, indicating the curve flattened modestly in that segment. However, comparing to 30 days ago, that same spread has steepened from roughly 0.58 percentage points, suggesting the curve has become steeper overall over the past month. The long end of the curve from the 10-year onward sits notably higher than the front end, maintaining a positive slope throughout. The 3-month rate at 3.67 percent sits below the 10-year at 4.18 percent, meaning the curve is not inverted in that segment.