Treasury Yield Curve Analysis

The 30-year Treasury finished Friday at 5.01%, up slightly from 4.99% last Friday. The broader curve also moved higher over the week. The 10-year yield reached 4.55%, climbing 10 basis points from 4.45% the prior Friday. The 2-year rate jumped to 4.17% compared to 3.98% a week earlier, a notable increase at the shorter end of the curve.

Looking at the full range of maturities, rates across the curve moved higher this week. The 3-month bill rose to 3.78% from 3.69%, while the 6-month climbed to 3.81% from 3.78%. The 5-year reached 4.29% versus 4.13% last Friday, and the 7-year moved to 4.41% from 4.27%. The 20-year yield was essentially unchanged at 5.03% compared to 4.98% a week ago.

Over the past month, the curve has steepened with notable increases at the front end. The 2-year rate rose to 4.17% from 3.78% one month prior, a significant 39 basis point jump. The 3-year climbed to 4.22% compared to 3.80%, while the 5-year moved to 4.29% from 3.92%. Longer maturities also increased, with the 10-year at 4.55% versus 4.31%, the 20-year at 5.03% versus 4.88%, and the 30-year reaching 5.01% from 4.91%. Short-term bills showed little movement, with the 4-week holding at 3.69%.

The curve remains inverted at the short end, with the 2-year yield sitting above the 3-month rate. However, this inversion has deepened compared to a month ago when the gap was narrower. The spread between the 10-year and 2-year has compressed over the past month, narrowing from 53 basis points to 38 basis points today. The curve has shifted higher overall compared to both last week and 30 days ago, with the most pronounced moves occurring at the 2-year maturity.