Treasury Rates Update: September 25th, 2025

Treasury yields climbed again this week, with movements most pronounced at medium and long maturities. Economist Bill Knudson emphasizes how the recent steepening in longer terms contrasts with flattening in the mid-curve, reflecting mixed market sentiment around growth and inflation.

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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  

Treasury Rates Update: September 25th, 2025

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Key Developments

• 10-Year Treasury Yield: Rose 7 basis points (bp) to 4.18%, with a two-week net increase of 17bp.

• Broad Yield Movements:

  • 2-Year yield climbed 7bp to 3.67%.

  • 5-Year yield increased 8bp to 3.86%.

  • 30-Year yield edged up 3bp to 4.75%.

• Yield Curve:

  • The curve remains positive beyond 2 years, but the medium-term slope is flattening, a potential early caution signal.

  • The 10–2 year spread held at 0.54%, unchanged from last week.

• Macro Context:

  • CPI ticked up from 2.7% to 2.9%, underscoring persistent inflation.

  • The Fed recently cut policy rates by 0.25%, balancing growth concerns with inflation risks.

  • The next key markers are the jobs report on Oct 3 and CPI on Oct 15.

Knudson’s Perspective

Knudson interprets the week’s movements as evidence of investor ambivalence: while the long end of the curve signals resilience, the mid-curve flattening suggests uncertainty about future growth. With inflation still sticky, he stresses that Treasury markets are bracing for volatility as upcoming data clarify whether the Fed’s recent cut was a one-off or the start of a broader easing cycle.