Treasury Yield Curve Analysis

The 30-year Treasury rate rose to 4.89 percent on Tuesday, up 2 basis points from last Tuesday. Looking at the broader picture, yields on longer maturities moved higher over the past week. The 10-year rate climbed to 4.3 percent from 4.26 percent, while the 20-year moved to 4.87 percent from 4.84 percent. Shorter-dated yields showed little change or edged lower. The 4-week rate fell to 3.67 percent and the 1-year rate dipped to 3.69 percent, both unchanged at the very front of the curve.

The yield curve shifted upward at the long end while holding steady or inching lower at the short end. The 2-year rate rose to 3.78 percent, up from 3.76 percent last Tuesday. The 5-year climbed to 3.91 percent versus 3.87 percent a week earlier. The 7-year moved to 4.09 percent from 4.06 percent. The 10-year gained 4 basis points, the largest weekly move among the benchmark maturities. Short-term rates barely budged, with the 6-month holding at 3.73 percent and the 3-month declining just 2 basis points to 3.69 percent.

Over the past month, the curve has steepened as longer rates rose significantly while shorter rates fell or stayed flat. The 2-year rate jumped 21 basis points from its level 30 days ago when it sat at 3.57 percent. The 5-year climbed 18 basis points from 3.73 percent, and the 10-year moved 15 basis points higher from 4.15 percent. The 30-year rate gained 11 basis points compared to one month ago. Short-term rates moved in the opposite direction, with the 4-week falling 8 basis points and the 6-week declining 2 basis points. The 3-month rate is essentially unchanged over the month at 3.69 percent.

The curve has steepened noticeably compared to both last week and 30 days ago. Last Tuesday, the difference between the 30-year and 3-month rates was 1.16 percentage points. Today that spread has widened to 1.2 percentage points. The 2-year and 3-month rates are nearly flat, with the 2-year at 3.78 percent just 9 basis points above the 3-month at 3.69 percent. The 7-year through 30-year segment has also steepened compared to last week, with the gap between the 7-year and 30-year widening to 80 basis points from 81 basis points last Tuesday.