2-Year U.S. Treasury Yield – Fed Funds Rate The current spread between the 2-year U.S. Treasury yield and the federal funds rate suggests that the bond market perceives the Federal Reserve’s monetary policy as tight. Image: Morgan Stanley Wealth Management
Fed Funds vs. 2-Year U.S. Treasury Yield (Leading Indicator) The current 2-year U.S. Treasury yield, which is below the federal funds rate, indicates that the Fed’s monetary policy is restrictive. Furthermore, the 2-year yield typically leads the fed funds rate by about 20 weeks. Image: Morgan Stanley Research
U.S. Rates – 2-Year and 10-Year Treasury Yield Forecasts BofA forecasts the 10-year UST yield at 3.75% by year-end 2024, suggesting the possibility of a downward trend in borrowing costs, particularly if inflation continues to moderate and economic growth slows. Image: BofA Global Research
10-Year/2-Year Treasury Yield Curve Around First Fed Rate Cuts The U.S. yield curve typically steepens once the prospect of interest rate cuts by the Fed becomes more imminent, rather than when the Fed actually stops hiking rates. Image: Goldman Sachs Global Investment Research
U.S. 2-Year Treasury Yield – Weekly Chart Technical analysis suggests that the 2-year U.S. Treasury yield is projected to decline by the end of 2024, with a potential target between 3.50% and 3.29%. Image: BofA Global Research
Yield Curve – U.S. 10-Year – 2-Year Government Bond Spread Historically, the re-steepening of the 10Y-2Y U.S. Treasury yield curve from the trough has preceded recessions. Image: The Daily Shot
U.S. 10-Year – 2-Year Yield Curve Historically, the re-steepening of the U.S. 10Y-2Y yield curve from the trough has preceded recessions. Image: Morgan Stanley Research
3-Day Change in U.S. 2-Year Treasury Yield The U.S. 2-year Treasury yield experienced its biggest three-day drop since October 1987. Image: BofA Global Investment Strategy
Germany 2-Year Government Bond Yield The German 2-year government bond yield, considered to be the most sensitive to European Central Bank (ECB) policy rate expectations, continues to rise. Image: The Daily Shot
Germany 2-Year Government Bond Yield The German 2-year government bond yield, considered to be the most sensitive to European Central Bank (ECB) policy rate expectations, hit a 14-year high. Image: BofA Global Investment Strategy
U.S. 2-Year Government Bond Yield The 2-year U.S. Treasury yield is rising as U.S. inflation may be more persistent than expected, which remains a headwind for U.S. stocks. Image: The Daily Shot