Treasury Yield Curve Analysis

The 30-year Treasury yield finished Monday at 4.91 percent, unchanged from one week ago when it also sat at 4.91. The long end of the curve has been remarkably steady over the past week after the 30-year rate declined nine basis points from Friday's 4.98 reading. Investors in longer-dated bonds have seen minimal movement in recent days, with rates hovering near the same levels since last Monday. This stability at the long end contrasts with the choppier action seen in shorter maturities.

Rates shifted lower across the board compared to Friday's close, with the declines more pronounced at longer maturities. The 20-year yield fell seven basis points to 4.92, the 10-year dropped nine basis points to 4.35, and the 7-year declined nine basis points to 4.16. Short-term rates moved down more modestly, with the 3-month slipping two basis points to 3.71 and the 1-year falling six basis points to 3.71. The 2-year rate, often sensitive to near-term expectations, fell six basis points to 3.82. Comparing to last Monday, most maturities are little changed, though the 20-year sits one basis point lower and the 10-year is just one basis point higher.

Looking back one month to mid-February, the curve has shifted notably lower overall. The most dramatic moves came at the long end, where the 20-year rate was around 5.26 and the 30-year was near 5.23, representing declines of roughly 34 and 32 basis points respectively. Intermediate maturities also moved lower, with the 10-year falling from around 4.58 and the 7-year declining from approximately 4.38. Short-term rates tell a different story, as the 3-month has barely moved from 3.73 last month while the 6-month has actually risen slightly from 3.72. The 1-year rate was also slightly higher at 3.77 a month ago.

The curve shape has transformed considerably over the past month. One month ago the 3-month sat above the 1-year, creating a traditional yield curve configuration. Today the 6-month at 3.73 sits above the 1-year at 3.71, a mild inversion that marks a meaningful shift. The short end spanning bills through the 1-year is compressed into a tight band between 3.71 and 3.74 with almost no slope. The biggest changes over 30 days have come from the long end, where the 20 and 30-year rates fell more than 30 basis points while short rates barely budged, flattening the overall curve shape and eliminating the steeper profile that existed in mid-February.