Treasury Yield Curve Analysis

The 30-year Treasury yield came in at 5.03 percent on Tuesday, down from 5.18 percent one week ago. That's a notable move lower over the past seven days for the longest maturity on the curve. Investors have been watching this benchmark closely as it hovers around the 5 percent level that has defined much of the recent market.

Rates moved lower across most maturities compared to last week, with the biggest declines seen in the 7-year and 10-year segments. The 10-year dropped to 4.50 percent from 4.67 percent, while the 7-year fell to 4.33 percent from 4.50 percent. The 2-year fell to 4.01 percent from 4.13 percent last Tuesday. Shorter-term bills were mixed, with the 3-month inching up to 3.68 percent and the 6-month holding at 3.80 percent.

Looking back 30 days to mid-April, the curve has shifted higher at nearly every maturity, with the biggest increases concentrated in the middle of the curve. The 3-year rose to 4.10 percent from 3.76 percent, gaining more than a quarter point over the month. The 5-year climbed to 4.19 percent from 3.87 percent. Even the shortest bills saw modest increases, with the 4-month moving to 3.78 percent from 3.70 percent.

The curve shape has flattened compared to both last week and a month ago. The 2-year to 10-year spread narrowed considerably over the past week as longer rates fell faster than short rates. This flattening is even more pronounced when compared to a month ago, with the 2-year rising significantly while the 30-year moved up by a smaller amount. The shortest maturity at 3.72 percent sits just below the 30-year at 5.03 percent, continuing an inverted relationship at the front end of the curve.