Treasury Yield Curve Analysis

The 30-year Treasury yield stood at 4.7% on Wednesday, holding steady compared to last week when it was at 4.71%. This long-term rate remains near its recent levels despite modest movement in other parts of the curve. The 20-year yield also held at 4.63%, unchanged from yesterday and just 2 basis points lower than one week ago. Investors have shown sustained interest in long-duration Treasuries, keeping the benchmark 30-year rate in a relatively narrow range.

The broader yield curve showed modest declines across most maturities compared to last week. The 10-year rate fell to 4.05% from 4.09%, while the 5-year dropped to 3.61% from 3.66%. The 2-year yield moved lower to 3.45% from 3.47%, and the 7-year dipped to 3.82% from 3.86%. Short-term rates were mixed, with the 4-week rate unchanged at 3.71% and the 3-month rate slightly lower at 3.69% versus 3.7% a week ago. Most of the curve shifted downward by small amounts over the past week.

Looking back 30 days to mid-January, rates have declined noticeably across the curve. The 30-year has fallen from 4.79% to 4.7%, while the 10-year dropped from 4.15% to 4.05%. The 5-year saw one of the larger moves, declining from 3.72% to 3.61%. Middle-duration yields also softened, with the 3-year falling from 3.56% to 3.49% and the 2-year moving from 3.51% to 3.45%. Short-term rates were relatively stable over the month, with the 3-month inching up slightly from 3.67% to 3.69%. The most pronounced monthly declines occurred in the 5-year and 10-year parts of the curve.

The yield curve continues to show an inverted shape at the shorter end, where 3-month rates at 3.69% sit above 2-year rates at 3.45% and 1-year rates at 3.53%. The curve then rises gradually through the middle maturities before steepening toward the long end, with the 30-year at 4.7% sitting 65 basis points above the 10-year at 4.05%. This steepness between 10 years and 30 years has narrowed compared to last week when the gap was 62 basis points and compared to a month ago when it was 64 basis points. The overall curve has shifted lower over both the past week and the past month, with the middle portion of the curve showing the most compression over the longer period.