Treasury Rates Update: October 2nd, 2025
- Bill Knudson
- Oct 3
- 1 min read
Treasury yields drifted lower this week, reflecting cautious investor sentiment ahead of key economic releases. Economist Bill Knudson notes that the yield curve remains positive for terms beyond two years, though the short end is under pressure as markets weigh potential Fed moves.
Upcoming Key Economic Data Release:
Next new job release is 10.3.25
Next inflation release 10.15.25
Next Fed meeting is 10.29.25
Key Developments
10-Year Treasury Yield: Declined 8 basis points (bp) to 4.10%, essentially flat over the past two weeks.
Broad Yield Movements:
2-Year yield fell 9bp to 3.55%.
5-Year yield declined 8bp to 3.86%.
30-Year yield slipped 6bp to 4.69%.
Yield Curve:
Remains positively sloped beyond two years.
The 10–2 year spread widened slightly to 0.55%, up from 0.54% last week.
Short-term dynamics remain unusual: the 1-month yield is still 56bp above the 1-year yield, even if the Fed cuts rates.
Knudson’s Perspective
Knudson interprets the week’s decline in yields as a sign of investor caution with the jobs report (Oct 3) and CPI release (Oct 15) looming. While the curve’s positive slope reflects resilience, the elevated very short-term yields point to uncertainty around Fed policy. He emphasizes that upcoming data will be pivotal in determining whether the Fed’s recent easing steps are sufficient or if further adjustments are warranted.
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