Treasury Rates Update: February 5th, 2026
- Bill Knudson
- 9 minutes ago
- 1 min read
In the wake of the Federal Reserve's recent decision to hold rates steady, the Treasury market has spent the first week of February in a state of modest retracement. As an economist who has tracked these cycles for decades, I view this week’s downward drift in yields not as a reversal of the broader trend, but as a tactical pause as the market digests the Fed's stance.
The benchmark 10-year Treasury rate declined by 3 basis points (bp) this week, contributing to a total decrease of 5bp over the past 14 days. While the headline move was small, the internal shifts within the term structure are quite revealing.
Upcoming Key Economic Data Release:Â Â
Next net new job release is February 6
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Next inflation release February 11
Next Fed meeting is March 18
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Key Developments
Broad Softening:Â Rates across most major maturities declined, with the 1-year, 2-year, and 5-year rates all dropping by 6bp.
Yield Curve Steepening:Â Despite the overall decline in rates, the 10-to-2 year spread widened to 0.74% from 0.71% last week, continuing the trend toward a steeper, more normalized curve.
Front-End Inversion: The 1-month rate remained flat at 3.72%, leaving it 28bp higher than the 1-year rate—a clear signal of persistent short-term liquidity premiums.
As we move forward, all eyes are on tomorrow's Jobs report (February 6th) and next week’s CPI data (February 11th). These indicators will be the true catalysts for the market’s next major move ahead of the March 18th FOMC meeting.