Treasury yields since the start of 2024
September 3, 2024
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Treasury yields since the start of 2024
Sept 3, 2024
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At the QRA in October 2023, Yellen loaded issuance with t-bills rather than coupons. Along with other factors, the result was a huge decline in yields into the end of December, accentuated by Powell’s dovish pivot at the December FOMC.
As the charts below show, 5’s tumbled from just under 5% to 3.8%.
Tens went from exactly 5% to 3.8%. And the 30-yr went from just over 5.1 to 3.93%. This year saw a rebound in yields into April, and now a renewed decline, as labor market conditions decelerate.
I think it’s instructive to look at end-of-year lows vs the current decline. Fives have edged to a lower level, but tens held the Dec low and are tentatively edging higher, and 30s never really reached end-of-year lows. The differences aren’t exactly dramatic, but they do reinforce the theme of curve steepening, and make buying the long end a bit problematic, at least until new lows in yields are actually made. Until then, 3.95% should be considered a floor for the 30yr bond yield.
