US yield curve flattest since 2007 as long duration treasuries soared after weak inflation

The yield curve is flattest since 2007
Long duration treasuries gained (yields dropped) on weak inflation, solid auction demand.

Omkar Godbole FXStreet Contributor

The spread between the US 10-year treasury yield and the 2-year yield, also known as the yield curve, has dropped to 42.79 basis points - the flattest since 2007. Meanwhile, the curve from 5 to 30 years flattened Thursday to the lowest level since August 2007.

The flattening of the yield curve could be associated with a rise in prices (drop in yields) of long duration treasuries after the weaker-than-expected US inflation release. "The core consumer price index up by a weaker-than-anticipated 0.1 percent from March and just 2.1 percent on an annual basis", according to Bloomberg.

Further, the auction of the 30-year bonds worth $17 billion (the largest-ever sale of the maturity) reportedly put a bid under prices, sending long duration yields lower.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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