Treasury Yield Curve Analysis

The 30-year Treasury yield reached 4.91 percent on Friday, moving higher from 4.88 percent a week earlier. This marks the longest maturity's third consecutive week of gains. The 20-year rate also climbed, settling at 4.88 percent compared to 4.85 percent last Friday. Short-term rates showed little movement, with the 4-week bill holding steady at 3.69 percent while the 6-week rose marginally to 3.72 percent from 3.70 percent.

Yields shifted higher across most of the curve this week compared to the previous Friday. The 10-year rate climbed to 4.31 percent from 4.26 percent, while the 7-year moved to 4.10 percent from 4.04 percent. The middle of the curve saw the steepest increases, with the 5-year reaching 3.92 percent and the 3-year at 3.80 percent, each climbing about eight one-hundredths of a percentage point. The 2-year ticked up to 3.78 percent from 3.71 percent, and the 1-year rose to 3.67 percent from 3.64 percent. Shorter maturities were mixed, with the 3-month holding at 3.69 percent and the 2-month declining slightly to 3.71 percent from 3.73 percent.

Looking back one month, the curve has shifted higher in the longer maturities while the very short end has declined. The 5-year now sits at 3.92 percent compared to 3.87 percent thirty days ago, and the 3-year has climbed to 3.80 percent from 3.74 percent. The 30-year has edged up to 4.91 percent from 4.90 percent, while the 10-year moved to 4.31 percent from 4.28 percent. Near the front of the curve, the 4-week rate has actually fallen to 3.69 percent from 3.75 percent, and the 3-month has declined to 3.69 percent from 3.72 percent. The 20-year remains nearly unchanged at 4.88 percent versus 4.89 percent a month ago.

The curve continues to show an inverted shape between several maturities. The 2-year at 3.78 percent sits above the 1-year at 3.67 percent, and the 7-year at 4.10 percent is below the 10-year at 4.31 percent. Over the past week, the inversions between the 2-year and 5-year and between the 7-year and 10-year have narrowed slightly. Compared to one month ago, the curve has flattened somewhat in the longer end while the short end has dropped, creating a modestly steeper overall shape. The gap between the 20-year and 30-year remains narrow at just three one-hundredths of a percentage point.