Treasury Rates Update: December 11th, 2025
- Bill Knudson
- Dec 13
- 2 min read
The US Treasury market experienced a notable week, heavily influenced by the Federal Reserve's rate decrease of 25 basis points on December 10th. This action immediately triggered a clear pivot in the yield curve, with short-term rates declining while longer-term maturities moved higher, reflecting the market's expectation of short-term easing but potentially persistent inflation concerns further out.
Upcoming Key Economic Data Release:
Next net new job release is Dec 16 for November (no month of Oct due to government shutdown)
Next inflation release Dec 18 (no month of Oct due to government shutdown)
Next Fed meeting is Jan 28 (Dec 10 Fed decreased rates 25bp for the 3rd meeting in a row)
Key Developments
The 10 Year Treasury rate was up 3bp for the week and is now up 14bp over the past two weeks. The significant event was the Fed's decision on December 10th, where rates were decreased by 25bp, causing the short end of the curve to drop sharply.
The analysis of the yield curve from last week to this week highlights this short-down, long-up movement:
The 1 month rate decreased by 6bp, shortly after the Fed meeting. The 1 year rate also declined by 4bp. The 2 year rate was unchanged at 0.00%. Longer terms, including the 5-year, 10-year, and 30-year, all saw increases of 3bp or 4bp.
This divergence means the yield curve is pivoting to a more positive position, with the 10 to 2-year spread steepening to 0.62% from 0.59% last week. The 1-month rate is currently 22bp above the 1-year rate, reinforcing the view that short-term rates have further room to move. Attention now turns to the next key releases: Jobs data on December 16th and CPI on December 18th. The next Fed meeting is scheduled for January 28th.
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