Treasury Yields Snapshot: July 14, 2023 | ETF Trends

The yield on the 10-year note ended July 14, 2023 at 3.83%, the 2-year note ended at 4.74%, and the 30-year at 3.93%.

Here is a table showing the yields’ highs and lows and the FFR since 2007.

Treasury Yields and Fed Funds Rate Since 2007

The charts below show the daily performance of several Treasury bonds since the pre-recession days of equity market peaks in 2007.

Treasury Yields Since 2007The next chart is an overlay of all 6 charts above along with the Fed funds rate (FFR) since 2007.

Treasury Yields and Fed Funds Rate Since 2007

A Long-Term Look at the 10-Year Treasury Yield

A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 oil embargo that triggered the era of “stagflation” (economic stagnation with inflation).

10-year Yield Log Scale

Here’s the latest 10-2 spread. Typically, the spread goes negative for a period and then out of the red prior to recessions. The lead time for recessions is quite a range – after going negative, recessions have begun anywhere from 16 to 62 weeks later. We also can see a false positive in 1998 where the spread went negative for a short period. For the 2009 recession, the spread went negative a couple of different times before rising.

If we use the first negative spread date as our starting point, the average number of weeks leading up to a recession is 37, or about nine months. If we use the last positive spread date after being negative before a recession, the average is 17 weeks, or 4.25 months and the median is 14 weeks, or 3.5 months.

10-year yield minus 2-year yield

10 year treasury yield, 2 year treasury yield, and Fed Funds Rate

The 30-Year Fixed Rate Mortgage

The latest Freddie Mac Weekly Primary Mortgage Market Survey put the 30-year fixed rate at 6.96%. Here is a long look back, courtesy of a FRED graph, of the 30-year fixed-rate mortgage average, which began in April of 1971.

Freddie Mac 30-Year

Now let’s see the 10-year against the S&P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior.

S&P 500, Fed Fund Rate, and 10-Year Yield with Federal Reserve Intervention

For a long-term view of weekly Treasury yields, also focusing on the 10-year, see our latest Treasury Yields in Perspective update.

ETFs associated with treasuries include: iShares 20+ Year Treasury Bond ETF (TLT)iShares 1-3 Year Treasury Bond ETF (SHY), and iShares 7-10 Year Treasury Bond ETF (IEF).

Note: We’ve updated this commentary with data through the July 14th market close.

For more news, information, and strategy, visit the Fixed Income Channel.

This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at VettaFi | Advisor Perspectives