Treasury Rates Update: September 18th, 2025
- Bill Knudson
- Sep 20
- 1 min read
Treasury markets moved higher this week, with long-term yields climbing despite signs of economic softness. Economist Bill Knudson emphasizes that the yield curve remains steep at the long end, but mid-curve flattening suggests lingering caution about growth.
Upcoming Key Economic Data Release:Â Â
Next new job release is 10.3.25
Next inflation release 10.15.25
Next Fed meeting is 10.29.25 Â
Key Developments
10-Year Treasury Yield:Â Increased 10 basis points (bp)Â to 4.11%, though still down 6bp over the past two weeks.
Broad Yield Movement:
5-Year yield rose 8bp to 3.76%.
7-Year yield gained 9bp to 3.86%.
30-Year yield moved up 7bp to 4.72%.
2-Year yield edged lower by 2bp to 3.57%.
Yield Curve:
The 10–2 year spread widened to 0.54%, up from 0.49% last week.
While the curve remains positively sloped for terms beyond 2 years, medium-term maturities are flattening, hinting at uncertainty.
Macro Context:
CPI ticked up from 2.7% to 2.9%.
Job growth slowed sharply, with only 22,000 new jobs added.
The Fed cut its policy rate by 0.25%, highlighting its balancing act between inflation and growth risks.
Knudson’s Perspective
Knudson interprets the week’s rate increases as markets adjusting to the Fed’s modest easing move. The steeper 10–2 spread signals near-term resilience, but mid-curve flattening reflects investor caution on growth. For decision-makers, this mixed message underscores the importance of monitoring how September data and Fed guidance shape yield expectations going forward.