Short-term rates continued their steady rise in October and medium and long-term rates tempered their rise from the previous month. The yield curve narrowed after widening in the previous month. Short-term rates have slowed their rise in rates but October breaks with the previous two months where the one-month bill had a session with higher rates than the three-month bill. That is, the one-month bill maintained the lowest rate throughout the month for the first time in three months. That is a promising sign as a narrowing of the yield curve from the bottom up has been a steadfast indicator of recession. All rates rose in October.
- All maturities' rates rose in October with the two-year rate rising the most in absolute terms and the one-year rate rising the most in relative terms.
- The one-month bill maintained the lowest rate throughout the month for the first time in three months.
- Medium and short-term rates rose faster than long-term rates on a percentage basis.
- The yield curve narrowed by one-hundredth of a point.
- As always, past performance is not indicative of future results.
- The rates have been at historic lows for quite some time which has not occurred previously.
The breadth of the yield curve narrowed slightly over the month from a range of 1.90 to a range of 1.89. The widest range was 1.97 on October 26 and the narrowest 1.81 on October 17.
The thirty-year bond held the highest rate throughout the month, although the rate has been fluctuating throughout the course of the month.
The one-month note held the lowest rate for every session. However, it has passed the one percent mark on several occasions throughout the month.
"Treasury Constant Maturity," Federal Reserve Bank of St. Louis, accessed October 30, 2017, https://fred.stlouisfed.org/categories/115.