Treasury Yield Curve Analysis

The 30-year Treasury yield ended the week at 5.27, moving higher from 5.16 last Friday. The long end of the curve has clearly strengthened over the past week, with the 20-year also climbing to 5.28 from 5.18. The 10-year moved up to 4.75 compared to 4.69 a week ago. These gains at the longer maturities represent some of the most notable moves across the entire curve this week.

Looking at the broader curve, the short end has actually moved lower while the long end has risen. Three-month rates dropped to 3.83 from 3.96 last Friday, while six-month bills fell to 3.98 from 4.08. On the flip side, the 7-year climbed to 4.59 from 4.55 and the 5-year reached 4.45 compared to 4.43 a week ago. The middle portion of the curve showed mixed movement, with the 2-year slipping to 4.28 from 4.33.

Looking back one month, the entire curve has moved lower across most maturities. The 10-year was at 4.88 four weeks ago compared to 4.75 today, while the 30-year has declined from 5.35 to 5.27. The 1-year rate dropped from 4.32 to 4.08, and the 6-month fell from 4.35 to 3.98. Even the 3-month has come down noticeably from around 4.15 a month ago to its current level of 3.83.

The curve has undergone a significant transformation. One month ago, the 2-year at 4.55 was well above the 10-year at 4.88, creating a noticeable inversion. Today, the 2-year at 4.28 sits below the 10-year at 4.75, meaning the curve now slopes upward normally. The long end has flattened considerably, with the 20-year at 5.28 and the 30-year at 5.27, nearly identical. A month ago those two maturities were 20 basis points apart, with the 20-year trading below the 30-year.