Treasury Rates Update: July 3rd, 2025
- Bill Knudson
- Jul 5
- 1 min read
In this week’s Treasury market overview, economist Bill Knudson highlights the return of upward pressure on yields, particularly across short and medium terms. His analysis points to increased market sensitivity ahead of key inflation and labor reports, with yield curve dynamics offering early clues about investor sentiment.
Upcoming Key Economic Data Release:
The next new jobs report is August 1.
The next CPI release is July 15.
The next Fed meeting is July 30.
Key Observations:
Treasury Rates Rise Across the Board:The 10-Year Treasury rate increased 9 basis points (bp) to 4.35%. Notably, the 2-Year rose 18bp, partially reversing its 24bp decline the previous week.
Current Treasury Yield Snapshot:
2-Year: 3.88%
5-Year: 3.94%
10-Year: 4.35%
30-Year: 4.86%
Yield Curve Trends:
The curve remains positively sloped beyond 2 years.
The 10–2 Year spread narrowed to 0.47% (down from 0.56%), signaling a flattening in medium-term expectations.
Short-term rates are increasingly volatile—another sign of market uncertainty.
Macro Context:
Job growth was moderate at 177,000 new jobs.
The Fed held rates steady; markets await the July 15 CPI report.
Knudson interprets this re-steepening and short-term volatility as a signal that markets are hedging both growth and inflation risks. For institutional decision-makers, he advises watching the 2–10 year slope—it’s where short-term volatility often translates into long-term opportunity or caution.
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