Treasury Rates Update: August 28th, 2025
- Bill Knudson
- Aug 30
- 1 min read
This week’s Treasury market activity underscores a notable decline in yields, particularly across medium-term maturities. Economist Bill Knudson highlights how investors are recalibrating expectations amid stable inflation and anticipation of upcoming Fed actions.
Upcoming Key Economic Data Release:
Next new job release is 9.5.25
Next inflation release 9.11.25
Next Fed meeting is 9.17.25
Key Developments
10-Year Treasury Yield: Fell 11 basis points (bp) over the week to 4.22%, with a net two-week decrease of 7bp.
Broad Yield Movement:
2-Year Treasury declined sharply, down 17bp.
5-Year and 7-Year notes each dropped 17bp.
30-Year yield eased modestly, down 4bp.
Yield Curve Structure:
The curve remains positively sloped for maturities beyond 2 years.
The 10–2 year spread widened from 0.54% to 0.60%, signaling slight steepening.
Macro Context:
CPI held steady at 2.7%.
Next Fed meeting: September 17.
Jobs data (Sept 5) and CPI release (Sept 11) will be key inflection points.
Knudson’s Perspective
Knudson interprets the downward shift in yields and the curve steepening as signs of cautious optimism. Investors appear to be pricing in slowing growth, but not outright recession. He advises decision-makers to watch the medium-term maturities closely, as they often serve as early signals of how policy shifts will filter into the broader economy.
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