10-Year Treasury Note

The 10-year treasury note is the most popular debt instrument in the world.

It is seen as a safe place to invest when the market is volatile because it is backed by the full faith of the US government – which has never defaulted on any of its debt. This makes the return over ten years very low but effectively guaranteed. Treasury yields have been trading at their highest levels since 2008 over the last few years, and this is expected to continue as interest rates stay high. We expect yields to remain at just under 4% through at least 2025.

The Federal Reserve hinted that they plan to begin cutting interest rates sometime this year. An inverted yield curve occurs when longer-term bond yields are below those of short-term bonds. This is unusual but not unprecedented, as investors typically expect to earn higher yields on longer-term bond investments. In addition, some consider an inverted yield curve to be a harbinger of recession. But so far, the U.S. economy continues to exhibit moderate growth with no immediate signs of a recession.

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