Treasury Yield Curve Re-Inverts With Sag In The Middle As Govt. Swats Down 10-Year Yield; Mortgage Rates Don't Follow All The Way

2025-03-24 09:40:00 ET

Summary

• The 10-year Treasury yield has careened lower from 4.77% on January 10 to 4.16% on March 3, and has since then wobbled a little higher to end at 4.26% on Friday.
• A lower 10-year yield boosts the economy and might add some fuel to inflation, which would be in line with the Fed’s three-year mantra “higher for longer” – higher Fed policy rates and higher inflation.
• With the latest move in yields, the spread between the 30-year mortgage rate and the 10-year Treasury yield widened to 2.41 percentage points.

The 10-year Treasury yield has careened lower from 4.77% on January 10 to 4.16% on March 3, and has since then wobbled a little higher to end at 4.26% on Friday, just a hair below the effective federal funds rate (EFFR) that the Fed targets with its short-term policy rates. This decline in the 10-year yield isn’t a coincidence....

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