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Treasury Yield Curve

A treasury yield curve simply plots dots representing treasury bill, note, and bond yields at each different maturity. When the dots are connected, we have made the yield curve. Yields longer than one year are determined by investors demand: What payment they feel they need to receive at each maturity date for taking the risk that inflation will erode away their earnings at each maturity range.

A treasury yield curve hardly ever “curves” like we imagine a street curving! Instead, it has a “slope,” like a hill. The slope of the yield curve can be “steeper” or “flatter.”

What is depicted here might be called a “normally sloping yield curve.” We call it “normal” because it is the slope or shape that occurs most of the time in the treasury market. It depicts longer-term securities offering higher yields than shorter-term securities.

Compare the solid line to the dotted line: We would say that the curve is “steepening.” This indicates investors are receiving higher yields for longer-term securities than they previously were receiving. This would suggest that inflation has become a bit of a worry for the longer term, and investors need to be paid more to take the risk of investing longer term.

There are many different “shapes” of the yield curve, each meaning something different about investors’ expectations of inflation. Entire books have been written on the subject! This is just one illustration and does not represent current rates.

Click for Treasury Yield Curve PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

04/27/2018 Today’s Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14

 

today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Treasury Yield Curve

A treasury yield curve simply plots dots representing treasury bill, note, and bond yields at each different maturity. When the dots are connected, we have made the yield curve. Yields longer than one year are determined by investors demand: What payment they feel they need to receive at each maturity date for taking the risk that inflation will erode away their earnings at each maturity range.

A treasury yield curve hardly ever “curves” like we imagine a street curving! Instead, it has a “slope,” like a hill. The slope of the yield curve can be “steeper” or “flatter.”

What is depicted here might be called a “normally sloping yield curve.” We call it “normal” because it is the slope or shape that occurs most of the time in the treasury market. It depicts longer-term securities offering higher yields than shorter-term securities.

Compare the solid line to the dotted line: We would say that the curve is “steepening.” This indicates investors are receiving higher yields for longer-term securities than they previously were receiving. This would suggest that inflation has become a bit of a worry for the longer term, and investors need to be paid more to take the risk of investing longer term.

There are many different “shapes” of the yield curve, each meaning something different about investors’ expectations of inflation. Entire books have been written on the subject! This is just one illustration and does not represent current rates.

Click for Treasury Yield Curve PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

04/27/2018 Today’s Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14

 

today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Investing involves risk, including possible loss of principal. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall. Adversely, as interest rates fall, bond prices will rise.

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