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Wednesday, January 3, 2024

Scott Carrithers
George Morris • Chris Thompson • Sean Doherty • Kevin Doyle • Mark Tranckino
Natalie Regan • Aaron Stoffer • David Farris • Lonnie Harris Brian Schaff Jeff Macy
Josh Kiefer • Robert Schuyler • Tom Toburen •  Todd Czinege

US Treasury Market

Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
12/26/23 5.37 5.37 5.27 4.81 4.36 4.07 3.89 3.92 3.90 4.21 4.05
12/27/23 5.37 5.40 5.27 4.78 4.24 3.98 3.80 3.82 3.80 4.11 3.95
12/28/23 5.38 5.38 5.27 4.80 4.28 4.03 3.84 3.87 3.85 4.15 4.00
12/29/23 5.41 5.34 5.26 4.77 4.25 4.01 3.85 3.88 3.88 4.19 4.03
01/02/24 5.38 5.37 5.26 4.80 4.32 4.09 3.91 3.94 3.93 4.23 4.07

The data in the table above is static as of the time it was pulled, so rates may have changed. Treat all data in this table and PMR as indications only and availability is always subject to change.   This information was pulled manually from sources we believe to be reliable. New source, as of 12/12/2022, Bloomberg, L.L.P.  As of:  close of business 01/02/2024.

Where Will Yields Be In Two Years?

While no one person can claim to know the actual direction of rates, this reasonable question and title of our PMR led to an analysis of the past three inverted yield curve cycles (’89, ’00, and ’06). 

Looking at the 2006 cycle, take a look at the graph below and let’s see what clues it might provide, should our current cycle follow the same path.

The red line is the Treasury curve on the day yields peaked (June 28, 2006). 

The blue curve represents yields 76 days (roughly 22%) after the peak in June. That might seem like a random point, but December 29, 2023 was 71 days (roughly 22%) from the October 19 highs. 

The green line plots yields two years after the date of the blue line.
Only the ’06 cycle is shown here, but ’89 and ’00 show a very similar trend.

Using the same pace at which rates moved in the prior three cycles, this final graph attempts to illustrate where rates might be in two years if the current trend follows these historical paths.


The green line above calculates the average percentage change from the blue to green lines of the previous three cycles. 

History doesn’t usually repeat itself; it does often rhyme. This exercise is not meant to promise exactly where yields will be in two years, but it indicates the yield curve likely could be lower and steeper than it is today.

Please contact your CMG representative to further discuss strategy for locking in today’s yields for years to come.

This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

•Not FDIC Insured •No Bank Guarantee •May Lose Value