U.S. 10-year Treasury Yields Decline by -100 Basis Points

-100 BPS Swing Down from a Prior Swing Up Greater than 100 BPS, First Time in 1-year

On December 6th, we presented our analysis in a post titled 'Peak Short-term U.S. Yields.' At that time, U.S. 1-year yields stood at 5.05%, while U.S. 10-year yields were at 4.15%. In response to the Federal Reserve's shift towards a more dovish stance, we now observe rates of 4.82% and 3.94% for the same maturities this morning. This new weakness in 10-year U.S. Treasury yields represents a continuation of the downward trend since the peak in October, amounting to a significant “round number” of -100 basis points.

When we examine historical precedents, it becomes evident that similar events have historically resulted in significant further declines in U.S. yields across various maturities.