Treasury Yield Curve Analysis

The 30-year Treasury yield stands at 4.9 percent as of Monday, edging slightly higher from 4.89 percent a week ago. This long-term rate has been climbing steadily over recent weeks, with investors showing continued demand for longer-term bonds despite the higher yields. The rate remains well below the peak levels seen during the curve's upward movement over the past month, but the general trend has been toward higher yields at the long end of the market.

Looking at the broader curve from short-term bills to long-term bonds, rates mostly moved lower compared to last week. The 2-year yield dropped from 3.84 to 3.78 percent, while the 5-year fell from 3.98 to 3.92 percent. The 10-year declined from 4.34 to 4.3 percent, and the 7-year moved down from 4.16 to 4.1 percent. Short-term rates also softened, with the 4-week bill moving from 3.72 to 3.69 percent and the 3-month rate dipping from 3.72 to 3.71 percent. Only the 30-year moved higher over the week, and that increase was minimal at just one basis point.

Over the past month, the curve has shifted substantially higher across most maturities. The 2-year rate has risen from 3.47 to 3.78 percent, representing one of the larger monthly increases along with the 5-year moving from 3.62 to 3.92 percent. The 10-year climbed from 4.05 to 4.3 percent, while the 30-year moved from 4.7 to 4.9 percent. The middle part of the curve saw the most pronounced shifts, with the 7-year jumping from 3.82 to 4.1 percent over the same period. The short end of the curve has been more stable, with the 3-month rate barely changing over the month.

The yield curve remains in an inverted position, where shorter-term rates are lower than longer-term rates. The 3-month bill at 3.71 percent sits below the 2-year yield at 3.78 percent, maintaining that inverted relationship. However, the curve has flattened compared to a month ago when the 2-year was at 3.47 percent and the 10-year at 4.05 percent, creating a wider gap. Today that spread between the 2-year and 10-year has narrowed, indicating a flattening trend even as overall rate levels have moved higher across the curve.