Treasury Yield Curve Analysis

The 30-year Treasury yield closed at 4.87 percent on Friday, rising five hundredths of a percent from last Friday's 4.82 percent. This marks the highest level for the long end of the curve in several weeks and represents a notable pickup in long-term borrowing costs over just seven days. The 20-year yield also moved higher to 4.82 percent, up four hundredths from 4.78 percent one week ago. Short-term rates, meanwhile, mostly declined, creating a mixed picture across the maturity spectrum compared to last Friday.

The broader yield curve showed a clear divergence on the week, with longer maturities moving higher while shorter ones edged lower. The 10-year yield ticked up two hundredths to 4.26 percent, while the 2-year fell eight hundredths to 3.52 percent. Rates at the very front end also declined, with the 4-week bill dropping six hundredths to 3.72 percent and the 1-year rate falling five hundredths to 3.48 percent. The middle of the curve saw modest declines, as the 3-year yield fell seven hundredths to 3.60 percent and the 5-year dropped five hundredths to 3.79 percent. The 6-month rate held steady at 3.61 percent, essentially unchanged from last week.

Looking back over the past month, rates have moved higher across most maturities, with the middle and long portions of the curve showing the most significant increases. The 10-year yield has climbed ten hundredths from 4.16 percent in late December, while the 5-year has risen nine hundredths to 3.79 percent. The 7-year also moved notably higher, gaining ten hundredths to reach 4.01 percent. Shorter maturities show a flatter trend, with the 3-month rate five hundredths higher at 3.67 percent, but the 1-year actually moved lower by three hundredths to 3.48 percent compared to 3.51 percent a month ago. The 30-year rate has risen five hundredths over the month, moving from 4.82 percent to the current 4.87 percent.

The curve shape has shifted considerably, with the yield spread between the 2-year and 10-year now standing at negative seventy-four hundredths, reflecting continued inversion at the front end. This inversion has deepened compared to last week's negative sixty-four hundredths spread. Over the past month, the curve has steepened in the middle and long portions, with the 5-year through 30-year range rising significantly while the shortest maturities moved more modestly. The gap between the 6-month and 10-year has widened to sixty-five hundredths, up from fifty-six hundredths last week and fifty-six hundredths one month ago.