Treasury Rates Update: August 20th, 2026
- Bill Knudson
- 38 minutes ago
- 1 min read
The fixed-income market is delivering a classic textbook lesson in yield curve dynamics following the latest inflation data. The August 12th CPI release confirmed that headline inflation has moderated to 3.5%, providing the bond market with much-needed breathing room ahead of the September 16th Federal Reserve meeting. Rather than sparking a broad rally, however, investors used the news to aggressively recalibrate short-to-intermediate maturities while long-term rates remained comparatively sticky.
The benchmark 10-year Treasury rate dropped 6 basis points (bp) this week to settle at 4.63%, bringing its cumulative 14-day decline to 5bp. This dip in intermediate yields drove a notable steepening of the term structure.
Upcoming Key Economic Data Release:
Next jobs release is September 4
Next CPI release is September 11
The next Fed meeting is on September 16
Key Developments
Intermediate Yield Rally: The 2-year yield fell 10bp to 4.15%, while the 1-year and 5-year rates dropped 9bp and 8bp to 3.97% and 4.32%, respectively.
Yield Curve Steepening: Driven by the sharp drop in 2-year yields relative to the 10-year, the 10-to-2-year spread widened to 0.48%, up from 0.44% last week.
Anchored Extremes: The 1-month and 30-year yields held essentially flat, edging down by just 1bp to 3.79% and 5.21%.
All focus now shifts to the September 4th labor market report for the next major directional signal.
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