Treasury Yield Curve Analysis

The 30-year Treasury yield fell to 4.85% on Monday, down from 4.90% a week ago. That is the lowest it has been since late December, though it remains above where it was a month ago at 4.80%. The longer end of the market saw decent selling pressure this week, pushing the benchmark mortgage rate lower.

Most maturities moved lower compared to last Friday. The 2-year dropped from 3.57% to 3.48%, while the 10-year fell from 4.29% to 4.22%. The middle of the curve also shifted down, with the 5-year at 3.75% and the 7-year at 3.97%. Near-term bills were largely unchanged, holding steady around 3.72% for the shortest tenors. The one-year rate edged down to 3.45% from 3.49% last week.

Over the past month, yields have risen across nearly the entire curve. The 20-year climbed from 4.75% to 4.79%, and the 10-year moved from 4.12% to 4.22%. Even the shorter end moved higher over 30 days, with the 2-year at 3.48% versus 3.45% a month ago and the 3-month bill at 3.69% compared to 3.68%. Only the 6-month rate held flat at 3.59%.

The curve remains upward sloping from the 2-year onward. The 2-year sits at 3.48% while the 10-year is at 4.22%, keeping a meaningful gap between short and long rates. The spread between the 1-year at 3.45% and the 2-year at 3.48% shows the curve has flattened in that area compared to last week when the 2-year was above 3.57%. Looking back a month, the 10-year has risen 10 basis points while the 2-year has risen just 3 basis points, so the long end has seen more upward pressure over the past month.