Treasury Yield Curve Analysis

The 30-year Treasury yield closed at 4.98 percent Thursday, climbing six hundredths of a percent from 4.92 percent one week ago. This marks the highest close for long-term rates in recent weeks, pushing back toward the five percent level that was briefly touched earlier in the year. Investors showed renewed focus on longer-duration bonds as the trading session progressed, with the 30-year rate settling just two hundredths below the five percent threshold.

Yields rose across nearly the entire maturity spectrum compared to last Thursday. The 10-year rate climbed to 4.40 percent from 4.34 percent, while the 7-year moved up to 4.20 percent from 4.13 percent. The 5-year reached 4.02 percent, up from 3.96 percent, and the 2-year ticked up to 3.88 percent from 3.83 percent. Short-term rates were mixed, with the 3-month holding steady at 3.68 percent while the 6-month actually dipped slightly to 3.71 percent from 3.72 percent last week.

Looking back one month, rates have moved higher across the board, with longer maturities showing the biggest gains. The 30-year rate has risen 15 hundredths of a percent since March 19, when it stood at 4.83 percent, while the 10-year has climbed the same amount from 4.25 percent. The 5-year increased 14 hundredths from 3.88 percent to 4.02 percent. Interestingly, the short end has moved in the opposite direction, with the 3-month rate falling five hundredths from 3.73 percent to 3.68 percent over the same period. The 6-month rate also declined, dropping from 3.76 percent a month ago to 3.71 percent Thursday.

The yield curve shows an unusual pattern at the very short end, where the 4-week maturity at 3.72 percent sits above the 3-month rate at 3.68 percent, creating a brief inversion in that segment. The 4-month rate at 3.76 percent is also higher than the 6-month at 3.71 percent. Moving further out, the 2-year at 3.88 percent sits well above the 1-year rate at 3.72 percent, maintaining a more pronounced inversion there. The curve then steepens through the middle maturities, with the spread between the 2-year and 10-year expanding to 52 hundredths of a percent. The long end of the curve remains relatively flat, as the 20-year at 4.97 percent and 30-year at 4.98 percent are separated by just one hundredth of a percent.