Treasury Yield Curve Analysis

The 30-year Treasury yield finished at 5.01 percent on Tuesday, slightly lower than yesterday's 5.03 percent but four basis points higher than last Tuesday's 4.97 percent. The bond market saw a broad selloff over the past week, pushing the longest maturity up to levels not seen in recent sessions. Investors showed renewed appetite for longer-term debt at the start of the week, bringing rates back down from Monday's highs. The 30-year has been hovering in the five percent range, reflecting ongoing uncertainty about the fiscal and inflation outlook.

Looking at the broader curve, rates moved lower across most maturities today compared to Monday, with short-term bills leading the decline. The 3-month rate dropped to 3.79 percent from 3.80 percent, while the 6-month fell to 3.82 percent from 3.83 percent. The 2-year and 3-year both moved lower, ending at 4.13 percent and 4.16 percent respectively. The 10-year rate declined to 4.53 percent from 4.56 percent, and the 20-year settled at 5.02 percent. However, the 1-year rate bucked the trend, climbing to 3.90 percent from 3.85 percent, suggesting some shift in near-term expectations.

Compared to last Tuesday, the curve has shifted higher at nearly every point, with the middle section showing the most pronounced moves. The 1-year and 2-year both rose eight basis points over the week, while the 5-year climbed nine basis points. Longer maturities also moved up, with the 10-year reaching 4.53 percent from 4.46 percent and the 20-year at 5.02 percent compared to 4.97 percent the prior week. The 3-month rate edged up two basis points over the same period to 3.79 percent, showing that even the shortest maturity has moved higher.

Looking back one month, the curve has shifted substantially upward across all maturities, with the middle section showing the largest moves. The 3-month rate has risen 11 basis points from 3.68 percent in late April, while the 1-year has climbed 19 basis points. The 2-year and 3-year have each risen about 30 basis points over the month, reaching 4.13 percent and 4.16 percent respectively. The 5-year and 7-year also jumped roughly 30 basis points. Longer maturities saw smaller moves, with the 10-year up 17 basis points and the 30-year up just seven basis points to 5.01 percent. The 20-year at 5.02 percent sits slightly above the 30-year, maintaining an unusual inversion at the long end that has persisted despite the overall curve steepening over the past week.