Treasury Yield Curve Analysis

The 30-year Treasury yield climbed to 5.18 percent on Tuesday, up from 5.03 percent a week earlier. That 15-basis-point jump over seven days represents one of the sharper weekly moves seen at the long end of the curve recently. The 20-year yield also moved higher, reaching 5.19 percent compared to 5.02 percent last Tuesday. Investors have watched long-dated yields drift steadily upward in recent sessions as bond prices weakened.

Yields rose across nearly the entire curve on Tuesday compared to the prior week. The 10-year yield climbed to 4.67 percent from 4.46 percent, while the 5-year moved to 4.32 percent from 4.12 percent. The 2-year yield increased to 4.13 percent versus 4.00 percent seven days ago. Even the shortest maturities edged higher, with the 3-month yield settling at 3.67 percent compared to 3.70 percent last Tuesday. The front end of the curve showed a slight dip at the very shortest tenors while everything from the 4-month maturity onward moved upward.

Looking back one month, yields are noticeably higher across the board. The 30-year yield has climbed 28 basis points from 4.90 percent in early April. The 20-year moved from 4.90 to 5.19 over the same span, an increase of 29 basis points. Short-term rates also pushed higher, with the 1-year yield rising to 3.83 percent from 3.68 percent. The 2-year went from 3.81 to 4.13, gaining 32 basis points over the month. The most striking monthly moves occurred at the long end, where yields jumped roughly a quarter to nearly a third of a percentage point.

The yield curve has steepened considerably over the past month. A month ago the spread between 2-year and 10-year yields was negative, with the 2-year above the 10-year by 52 basis points. That inversion has fully unwound, with the 10-year now sitting 54 basis points above the 2-year. The spread between 3-month and 10-year yields has widened from 62 basis points a month ago to a full percentage point today. Comparing just the past week, the curve also shifted higher and steeper, with long-term rates gaining more ground than short-term rates.