Treasury Yield Curve Analysis

The 30-year Treasury yield fell to 4.88 percent Friday, slipping from 4.91 a week earlier. The yield reached as high as 4.93 Thursday before retreating. The 10-year yield dropped to 4.26, down from 4.31 last Friday, with most of the weekly decline occurring Thursday when the rate fell from 4.32. Long-term yields have trended lower over the past week after climbing in the early part of the period.

Rates fell across most maturities compared to last Friday. The 5-year yield came in at 3.84 versus 3.94 a week ago, while the 7-year declined to 4.04 from 4.12. The 2-year yield settled at 3.71, lower than 3.81 last Friday. Shorter maturities showed smaller shifts, with the 3-month rate holding steady at 3.70 and the 1-year yield at 3.64 compared to 3.70 the prior week.

Over the past month, yields have moved higher across the board. The 30-year rate climbed 11 basis points from 4.77 to 4.88, while the 10-year rose from 4.15 to 4.26. Intermediate maturities saw larger increases, with the 5-year climbing from 3.72 and the 3-year moving from 3.59. The 2-year yield stood at 3.56 a month ago compared to 3.71 today. Short-term rates showed more modest movement, with the 1-year rising from 3.55 and the 6-month inching up from 3.66.

The curve steepened slightly on the week. The gap between the 2-year and 10-year narrowed to 55 basis points from 50 basis points last Friday. The 30-year sits just 3 basis points above the 20-year at 4.88, down from a 4 basis point spread last week. Earlier this week the curve inverted briefly in that segment, with the 30-year trading below the 20-year. Month-over-month, the curve has become steeper as intermediate yields rose more sharply than long-term rates.