Treasury Rates Update: May 29th, 2025

Bill Knudson
May 30
1 min read

Upcoming Key Economic Data Release:

The next new jobs report is June 6.
The next CPI release is June 11.
The next Fed meeting is June 18.

In his latest briefing, economist Bill Knudson provides a seasoned perspective on the Treasury market's subtle yet telling shifts. With decades of macroeconomic expertise, Knudson dissects the weekly movements with an eye toward broader economic implications and policy signals.

Key Observations:

Decline in Long-Term Yields: The 10-Year Treasury yield fell 15 basis points (bp) over the past week, now sitting at 4.43%. This brings the net two-week change to a 10bp decrease.
Short-Term vs. Long-Term Movement:
- 2-Year: dropped 8bp to 3.92%
- 5-Year: dropped 11bp to 4.00%
- 30-Year: dropped 13bp to 4.92%
- 1-Month and 1-Year terms were mostly flat.
Yield Curve Commentary:
- The curve remains positively sloped beyond 2 years.
- However, the medium-term flattening hints at emerging caution in economic outlooks.
Spread Shift: The 10–2 Year spread narrowed from 0.54% to 0.51%, a small but meaningful change signaling lower term premiums.

Knudson contextualizes this decline in yields as a reflection of investor recalibration ahead of key June indicators—Jobs (6/6), CPI (6/11), and the Fed meeting (6/18). His analysis underscores that the market is balancing tempered inflation optimism with lingering growth uncertainty, a classic environment for decision-makers to stay vigilant.