Treasury Yield Curve Analysis

The 30-year Treasury yield closed at 5.19 percent Wednesday, down from 5.28 percent the previous session and 5.24 percent one week ago. The long end of the market saw the most significant decline today, with the 20-year rate dropping to 5.17 percent from 5.28 percent yesterday. This represents a notable pullback in longer-dated yields after climbing steadily over recent weeks. The weekly comparison shows the 30-year rate is still five basis points lower than where it stood last Wednesday.

Rates moved lower across most of the curve Wednesday, though the short end held relatively steady. The 10-year yield fell to 4.65 percent from 4.71 percent yesterday, while the 7-year declined to 4.48 percent from 4.53 percent. The 5-year rate decreased to 4.35 percent, and the 2-year held at 4.19 percent. At the very front of the curve, the 4-week and 6-week bills dipped slightly to 3.77 percent, while the 1-year rate ticked up one basis point to 4.00 percent.

Looking back 30 days to mid-July, yields have risen across the entire curve. The 30-year rate has climbed 13 basis points from 5.06 percent, while the 20-year has gained 10 basis points. The 10-year moved from 4.56 percent to 4.65 percent, an increase of nine basis points over the month. Shorter maturities showed smaller increases, with the 2-year up just two basis points at 4.19 percent. The most dramatic monthly shift occurred at the very short end, where the 4-week rate rose from 3.67 percent to 3.77 percent, a ten basis point jump in the shortest tenor.

The curve maintains its typical upward slope from the 5-year maturity onward, though it remains inverted between shorter maturities. The 4-week through 1-year rates all sit below the 2-year at 4.19 percent, creating an inversion in that segment. From the 5-year at 4.35 percent through the 30-year at 5.19 percent, the curve slopes upward as expected. Comparing the shape to last week, the 2-year to 10-year spread has narrowed slightly, reflecting the steeper drop in longer rates relative to the middle of the curve. Over the past month, the curve has shifted upward and steepened modestly, with longer maturities rising more than shorter ones, increasing the slope between the 2-year and 30-year by about six basis points compared to 30 days ago.