30-Year & 20-Year Treasury Yields Back over 5%, 10-Year over 4.5%, Yield Curve Steepens at Long End, Mortgage Rates Back over 7%
The 30-year Treasury yield ended Friday at 5.04%, after kissing 5.15% on Thursday. These above-5% yields are the highest since the debt-scare in October 2023. The 20-year yield has also been above 5% for the last three days of the week.
The Fed started cutting its policy rates in mid-September 2024, by a total of 100 basis points so far. The Effective Federal Funds Rate, which the Fed targets with its policy rates, has dropped by 100 basis points, from 5.33% to 4.33% (blue line in the chart).
But over the same period since mid-September, the 30-year yield has surged by 110 basis points, in a spectacular counter-move (red in the chart). The gyrations around “Liberation Day” now look just like some additional squiggles in a longer up-trend.