Treasury Yield Curve Analysis

The 30-year Treasury rate closed at 4.91 today, down slightly from 4.94 one week ago. This represents a modest weekly decline for the longest maturity as investors continue to assess the longer-term economic outlook. The rate remains well below the levels seen earlier this year, reflecting shifting expectations for growth and inflation further out on the curve.

Rates at the shorter end of the curve moved higher over the past week while longer maturities declined. The 4-week bill rose to 3.70 from 3.65, and the 6-month note climbed to 4.01 from 3.96. Most other maturities fell, with the 5-year dropping to 4.19 from 4.27 and the 7-year declining to 4.30 from 4.38. The 10-year yield fell to 4.44 from 4.50, while the 20-year slipped to 4.93 from 4.96. This divergence between the short end and the rest of the curve reflects different market dynamics at different time horizons.

Over the past month, the short end has strengthened considerably while longer maturities have pulled back. The 3-month rate stands at 3.87 compared to 3.67 a month ago, and the 6-month has risen to 4.01 from 3.77. The 1-year also increased to 3.98 from 3.83. Further out, the 5-year has fallen to 4.19 from 4.32, and the 7-year has declined to 4.30 from 4.50. The 10-year dropped to 4.44 from 4.67, while the 20-year fell to 4.93 from 5.19. The 30-year has declined to 4.91 from 5.18 over the same period.

The curve has flattened over the past month, with longer maturities declining more sharply than shorter ones. A week ago, the 2-year-10-year spread was 34 basis points, now it is 30 basis points. One month ago, that same spread was 54 basis points, so the curve has flattened meaningfully over the past four weeks. The relationship between the 3-month and 1-year rates has flipped from a week ago, when the 1-year was higher, to today where the 1-year now sits below the 3-month. The overall curve remains modestly upward-sloping, stretching from 3.87 at the short end to 4.91 at the long end.