Treasury Yield Curve Analysis

The 30-year Treasury yield held steady at 5.24 percent on Wednesday. This rate is higher compared to last Wednesday when it settled at 5.17 percent, representing a move of 7 basis points over the past week. The long end of the curve has been trending upward since early August, with investors showing caution about holding longer-dated debt.

Looking at the broader curve compared to one week ago, the longer maturities moved higher while shorter-term rates declined. The 10-year climbed from 4.63 to 4.68 percent, and the 7-year rose to 4.52 from 4.47 percent. The 2-year ticked up to 4.20 from 4.18 percent. On the shorter end, the 3-month fell to 3.87 from 3.89 percent, the 2-month dropped to 3.80 from 3.84 percent, and the 1-year slipped to 4.00 from 4.03 percent. This divergence between the two ends of the curve stands out as a key development this week.

Over the past month, rates across the curve have moved higher overall. The 30-year climbed from 4.97 to 5.24 percent, a notable 27 basis point increase. The 20-year similarly rose 27 basis points to reach 5.24 percent. The 10-year moved from 4.48 to 4.68 percent, adding 20 basis points. Mid-range maturities also increased, with the 7-year gaining 17 basis points and the 5-year rising 14 basis points. Short-term rates showed mixed movement over the month, as the 4-week rate moved from 3.67 to 3.78 percent while the 6-month declined slightly to 3.97 from 4.00 percent.

The yield curve has steepened considerably in recent weeks. One month ago, the spread between the 2-year and 10-year stood at 31 basis points. Today it sits at 48 basis points, indicating a wider gap between short and medium-term rates. The spread between the 10-year and 30-year has expanded dramatically, moving from 49 basis points a month ago to 56 basis points today. Compared to last week, the curve has shifted from a slightly flatter posture to a steeper one, driven primarily by long-end rates rising while the short end declined. The overall shape reflects higher rates at virtually every maturity compared to both last week and one month ago.