Treasury Yield Curve Analysis

The 30-year U.S. Treasury yield settled at 4.88 percent on Monday, edging two hundredths lower compared to last Monday when it stood at 4.90 percent. The broader market saw yields decline across most maturities over the past week. The middle of the curve saw the most significant pullback, with the 2-year, 3-year, 5-year, and 7-year yields all falling six hundredths to 3.72, 3.73, 3.86, and 4.04 percent respectively. Longer-dated maturities also moved lower, with the 10-year dropping four hundredths to 4.26 percent and the 20-year falling three hundredths to 4.85 percent.

The front end of the curve remains essentially flat, with the 4-week through 6-month maturities clustered in a narrow range between 3.69 and 3.72 percent. Rates then dip slightly at the 1-year maturity to 3.65 percent before rising through the middle maturities. The 5-year stands at 3.86 percent and the 10-year at 4.26 percent, with the 20-year and 30-year reaching 4.85 and 4.88 percent respectively. The spread between the 20-year and 30-year has narrowed considerably over the past week, tightening to just three hundredths from six hundredths previously. The 10-year to 30-year spread also compressed from sixty hundredths last Monday to sixty-two hundredths today.

Looking back one month to mid-March, rates have climbed meaningfully across the curve. The 2-year has risen sixteen hundredths from 3.56 percent to its current 3.72 percent level. The 3-year and 5-year both moved up fifteen hundredths, reaching 3.73 and 3.86 percent respectively. The 7-year increased fourteen hundredths to 4.04 percent, while the 10-year and 30-year each climbed sixteen hundredths to 4.26 and 4.88 percent. Short-term rates have been more stable over the month, with the 3-month holding steady at 3.71 percent and the 6-month at 3.72 percent compared to 3.71 and 3.68 percent four weeks ago.

The yield curve from the 2-year through 30-year remains upward sloping, though the front end from 1-year to 2-year shows an inversion with the 1-year at 3.65 sitting below the 2-year at 3.72. Comparing the 2-year and 10-year spread of fifty-four hundredths to last week's fifty-two hundredths, the curve has steepened modestly as the 2-year fell more sharply than the 10-year. Over the past month, the entire curve from 2-year onward has shifted higher by roughly fifteen to sixteen hundredths, while the front end has remained relatively anchored. The 30-year now sits just three hundredths above the 20-year, compared to just two hundredths a week ago, indicating the longer end has flattened slightly.