Treasury Yield Curve Analysis

The 30-year Treasury yield settled at 4.86 percent Monday, climbing 14 basis points from last Monday's 4.72 percent reading. This marks a notable move for the long end of the curve, as investors reassessed longer-term economic expectations over the past week. The rate has now moved back toward levels seen a month ago, erasing much of the decline observed in recent weeks.

Rates rose across nearly every maturity compared to last week, with the middle and long portions of the curve seeing the largest increases. The 2-year yield jumped from 3.56 to 3.68 percent, while the 10-year climbed from 4.12 to 4.23 percent. The 20-year rate moved from 4.70 to 4.83 percent, and the 7-year also ticked up to 4 percent from 3.90 percent. Shorter-dated maturities of 6 months and under remained relatively stable, changing by just a few basis points or less.

Looking at the past month, the curve has shifted in a notable pattern. The 1-year yield rose from 3.49 to 3.64 percent, and the 2-year moved from 3.57 to 3.68 percent. However, the longer end tells a different story. The 10-year has actually fallen from 4.29 percent a month ago to 4.23 percent today, and the 30-year has declined from 4.90 to 4.86 percent. This divergence means the short end has moved higher while the very long end has moved lower over the past 30 days.

The curve remains upward sloping overall but with some interesting dynamics. The spread between the 2-year and 1-year has inverted, with the shorter maturity now yielding slightly more than the 1-year. Comparing to last week, the curve steepened as rates rose more sharply at the long end than the short end. Over the past month, the curve has flattened in a different way, with the short end rising substantially while the longest maturities actually moved lower, narrowing the gap between the 10-year and 30-year rates.