Treasury Rates Update: June 26th, 2025

Upcoming Key Economic Data Release:  

• The next new jobs report is July 3.

  
  

• The next CPI release is July 15.

  
  

• The next Fed meeting is  July 30.  

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In this week’s Treasury market analysis, economist Bill Knudson highlights a notable downward shift in yields, attributing the movement to evolving investor expectations around inflation and monetary policy. As always, Knudson focuses not just on rates, but on what they reveal about deeper market psychology.

Treasury Rates Update: June 26th, 2025

Key Developments:

• Significant Rate Drop: The 10-Year Treasury yield declined 12 basis points (bp) over the week, closing at 4.26%. The two-week net drop is 15bp.

• Yield Curve Snapshot (as of June 26):

  • 2-Year: 3.70%

  • 5-Year: 3.79%

  • 10-Year: 4.26%

  • 30-Year: 4.81%

• Curve Dynamics:

  • The 10–2 Year spread widened to 0.56%, up from 0.44%—a sign of steepening.

  • Yield curve remains positive beyond two years, but medium-term rates fell more sharply, reflecting recession-tinged caution.

• Economic Context:

  • CPI nudged up from 2.3% to 2.4%.

  • The Fed held rates steady, while markets appear to be pricing in slower future growth.

Knudson interprets this as a market repricing moment, where expectations for future rate cuts are building despite ongoing inflation concerns. For financial decision-makers, this steeper yield curve signals a pivotal moment to reassess fixed-income strategies and borrowing timelines.