Treasury Yield Curve Analysis

The 30-year Treasury yield ended the week at 4.96 percent, rising from 4.90 percent last Friday. This marks a steady climb through the week, with yields moving higher each day across the long end of the curve. The 20-year rate reached 4.97 percent, briefly trading above the 30-year yield at one point during the session. Investors saw steady increases across longer maturities as the week progressed, pushing the 30-year rate to its highest level in recent trading.

The yield curve shifted higher across nearly all maturities compared to last week. The 2-year rate climbed to 3.88 percent from 3.73 percent, while the 5-year moved to 4.01 percent from 3.87 percent. The 10-year reached 4.39 percent, up from 4.28 percent the prior Friday. Short-term rates also moved up, with the 1-year rising to 3.80 percent from 3.66 percent. The 3-year showed one of the larger weekly increases, reaching 3.90 percent compared to 3.74 percent last week.

Looking back one month, rates have moved substantially higher across the curve. The 2-year climbed from 3.50 percent to 3.88 percent, while the 1-year rose from 3.45 percent to 3.80 percent. The 3-year went from 3.57 percent to 3.90 percent over the same period. Medium-term maturities also shifted higher, with the 5-year at 4.01 percent versus 3.76 percent a month ago. The 10-year increased from 4.22 percent to 4.39 percent, and the 30-year moved from 4.85 percent to 4.96 percent. The most pronounced monthly increases occurred at the shorter end of the curve, with the 2-year showing the largest month-over-month jump.

The curve has flattened noticeably compared to both last week and one month ago. The 2-year to 10-year spread has compressed from 72 basis points a month ago to 51 basis points today. At the longer end, the 20-year and 30-year yields are now nearly identical at around 4.97 and 4.96 percent, a striking inversion compared to last week when the 30-year sat 6 basis points above the 20-year. The overall curve has shifted higher over the month while maintaining its general upward slope from the 1-year through the 30-year, though the gap between shortest and longest maturities has narrowed as short-term rates climbed more aggressively than long-term rates.