Treasury Yield Curve Analysis

The 30-year Treasury yield settled at 5.19 percent on Thursday, inching one basis point higher than Wednesday's close of 5.18 percent. Compared to one week ago, the long end of the curve has shifted lower, with the 30-year rate falling from 5.23 percent last Thursday. The 10-year yield came in at 4.67 percent, down two basis points from last week's 4.69 percent reading. The 20-year rate held steady near the long end at 5.18 percent, just two basis points below where it traded a week prior at 5.20 percent.

Looking at the broader curve from the shortest to longest maturities, rates ranged from 3.79 percent at the 6-week tenor up to 5.19 percent at 30 years. The 2-year yield stood at 4.20 percent, one basis point higher than last Thursday's 4.19 percent, while the 5-year ticked down slightly to 4.38 percent from 4.39 percent the prior week. The 7-year rate decreased one basis point to 4.52 percent, matching the modest downward pressure seen across much of the intermediate portion of the curve this week. Short-term rates moved modestly higher, with the 1-year rising to 4.04 percent from 3.99 percent last week.

Over the past month, the yield curve has shifted upward across nearly all maturities as rates climbed from their late July levels. The 30-year rate has risen ten basis points from 5.09 percent one month ago, while the 10-year has moved ten basis points higher from 4.57 percent. The most notable monthly shifts occurred in the intermediate segment, with the 3-year climbing ten basis points to 4.30 percent and the 7-year increasing eleven basis points to 4.52 percent. The 5-year rose ten basis points from 4.28 percent, and the 20-year moved up nine basis points from 5.09 percent. Short-term rates showed more modest movement over the same period, with the 3-month holding steady at 3.84 percent and the 6-month unchanged at 3.94 percent.

The curve retains its characteristic upward slope from the 2-year through the 30-year maturities, though the shape has changed compared to recent periods. The spread between the 2-year and 10-year currently sits at 47 basis points, slightly wider than the 50 basis point spread observed last week. Month-over-month, this spread has widened considerably from just 41 basis points one month ago when the 2-year stood at 4.16 percent and the 10-year at 4.57 percent. The shorter end of the curve remains inverted relative to some intermediate maturities, with the 1-year at 4.04 percent sitting below the 2-year at 4.20 percent, continuing a pattern that has persisted over recent weeks despite some narrowing of the inversion.