Treasury Yield Curve Analysis

The 30-year Treasury yield ended Wednesday at 5.08 percent, up 2 ticks from last week when it sat at 5.06 percent. Short-term rates moved higher at the very front of the curve, with the 4-week rate climbing to 3.73 percent from 3.67 percent one week ago. The 6-week rate edged up to 3.76 percent. Most other maturities declined over the week, with the 1-year rate falling to 3.97 percent from 4.06 percent and the 2-year dropping to 4.13 percent from 4.21 percent. The 10-year slipped just a fraction to 4.55 percent compared to 4.56 percent last Wednesday.

Rates fell broadly across the middle and long end of the curve compared to one week ago. The 3-month rate decreased to 3.83 percent from 3.87 percent, while the 6-month dropped to 3.93 percent from 3.99 percent. The 2-year fell 8 ticks to 4.13 percent, the 3-year slipped to 4.18 percent from 4.21 percent, and the 5-year moved to 4.26 percent from 4.31 percent. The 7-year rate declined to 4.39 percent while the 20-year held steady at 5.07 percent.

Looking back 30 days to early June, the entire curve has shifted higher. The 30-year has climbed to 5.08 percent from 4.99 percent, while the 10-year rose to 4.55 percent from 4.49 percent. The 20-year moved to 5.07 percent compared to 5.00 percent a month ago. Short-term rates also increased, with the 3-month going from 3.78 percent to 3.83 percent and the 1-year climbing to 3.97 percent from 3.84 percent. The 2-year moved to 4.13 percent from 4.08 percent, and the 5-year sits at 4.26 percent versus 4.21 percent one month prior.

The curve retains its inverted shape through the 7-year maturity, with the 2-year at 4.13 percent still sitting below the 10-year at 4.55 percent. This inversion narrowed slightly from last week when the gap was 35 basis points. Beyond the 10-year, the curve rises steeply, jumping 52 basis points to the 20-year at 5.07 percent before flattening modestly into the 30-year. Over the past month, the longer end of the curve has steepened while the inversion between shorter maturities has remained relatively stable.