Treasury yields climbed this week, with the 10-year Treasury yield rising roughly 12 basis points from last Friday to 1.45% (up 54 basis points year-to-date), and the 5-year Treasury yield rising 19 basis points week-over-week to 0.77% (up 41 basis points year-to-date), at the time of this report. Meanwhile, the short end of the Treasury yield curve remains anchored near 0.0%, driven by ongoing accommodative monetary policy. The ICE BofA MOVE Index (a measure of U.S. Treasury yield volatility) jumped more than 20% week-over-week, to its highest level since last April. The spread between 2-year Treasury yields and 10-year Treasury yields has widened to 131 basis points from 54 basis points in the last six months. We believe the continued steepening of the Treasury yield curve is consistent with an improving economic outlook, more widespread vaccine distribution, the anticipation of ongoing fiscal stimulus, and a pick-up in inflation.

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