Treasury Rates Update: May 7th, 2026
- Bill Knudson
- 3 hours ago
- 1 min read
In the wake of the Federal Reserve’s decision to hold rates steady on April 29th, the Treasury market has entered a phase of consolidation marked by a distinct flattening of the yield curve. As an economist who has tracked these cycles for decades, I view this week’s action as a subtle recalibration; while long-term yields remain anchored, short and intermediate rates are edging higher as the market digests the "higher-for-longer" policy reality.
The benchmark 10-year Treasury rate edged up just 1 basis point (bp) this week to 4.41%, contributing to a cumulative two-week increase of 7bp. However, the real story lies in the shifting internal dynamics of the term structure.
Upcoming Key Economic Data Release:
Next jobs release is June 5
Next CPI release is May 12
The next Fed meeting is on June 17
Key Developments
Key developments in the yield curve include:
Intermediate Pressure: The 2-year and 1-year rates both rose by 4bp, reaching 3.92% and 3.76% respectively.
Long-End Stability: While the 10-year rose 1bp, the 30-year rate actually declined by 1bp to finish at 4.97%.
Curve Flattening: Due to the surge in short-term rates relative to the long end, the 10-to-2 year spread decreased to 0.49% from 0.52% last week.
Short-End Realignment: The 1-month rate held flat at 3.72%, leaving it 4bp below the 1-year rate.
With the May 1st Jobs report now in the rearview, all eyes turn to the May 12th CPI release as the final major catalyst before the June 17th Federal Reserve meeting.
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