Treasury Yield Curve Analysis

The 30-year Treasury yield dropped to 4.78 percent Tuesday, down from 4.90 percent one week ago. This represents the largest weekly decline among the longer maturities and brings the benchmark rate back to levels not seen since late December. The decline reflects a broader shift lower in rates following last week's elevated levels, with investors adjusting positions across the curve.

The yield curve shifted lower across nearly all maturities compared to last week. The 30-year fell 12 basis points while the 10-year also declined 12 basis points to 4.16 percent. Middle maturities saw even steeper declines, with the 5-year dropping 13 basis points to 3.70 percent and the 3-year falling 14 basis points to 3.50 percent. Short-term rates moved down modestly, with the 1-year at 3.40 percent down 9 basis points and the 3-month holding steady at 3.69 percent.

Looking back over the past month, rates have generally moved lower at the long end while the short end remained relatively flat. The 30-year is now 3 basis points lower than its level from 30 days ago at 4.81 percent. The 10-year has barely moved, standing at 4.16 percent compared to 4.14 percent a month earlier. Most notably, the 2-year has remained unchanged at 3.45 percent over the same period, while the 3-year inched up 1 basis point to 3.50 percent from 3.50 percent.

The curve remains steeply upward sloping, though the degree of steepness has shifted compared to recent periods. The spread between the 2-year and 30-year stands at about 133 basis points, narrower than the 142 basis points seen last week but wider than the 120 basis points from a month ago. The front end of the curve shows some inversion, with the 6-month rate at 3.58 percent sitting below the 3-month rate at 3.69 percent. Long-term rates have pulled back sharply over the past week, bringing them closer in line with their levels from earlier in the year.