Treasury Rates Update: December 4th, 2025
- Bill Knudson
- Dec 6, 2025
- 1 min read
The U.S. Treasury market made a strong directional move this past week, signaling a distinct anticipation of future policy changes ahead of the December 10th Fed meeting. We saw a clear pivot in the yield curve toward a more positive, or steepening, position. This dramatic shift involved a significant drop in the shortest-term rates alongside a broad rise in longer maturities, painting a picture of expected short-term easing coupled with persistent long-term inflation or growth expectations.
Upcoming Key Economic Data Release:
Next net new job release is 12.5.25
Next inflation release 12.10.25
Next Fed meeting is 12.10.25 (Fed reduced rates 25bp on 10.29.25)
Key Developments
The 10 Year Treasury rate finished the week up a notable 11bp, driven by a 0.07 jump on December 1st and a 0.05 increase on December 4th. Despite this recent surge, the rate is still down 2bp over the past two weeks.
The changes across the curve highlight a stark divergence:
The 1-month rate collapsed by 23bp, bringing it closer to the 1-year rate, which itself barely moved, declining by just 1bp.
The intermediate and long ends saw substantial increases: the 2-year rate rose 7bp, while the 5-year, 10-year, and 30-year rates all climbed 11bp to 12bp.
Consequently, the 10-to-2-year spread steepened to 0.59% from 0.55% the week prior. The 1-month rate remains 23bp above the 1-year rate, reinforcing the likelihood of a further short-term Fed cut. The market's attention is now entirely focused on the upcoming CPI and FOMC meeting on December 10th.
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