The U.S. Yield Curve Is the Flattest Since August 2007
- Weaker-than-forecast inflation, solid auction spur rally
- BMO sees further flattening; Guggenheim says Fed is on course
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The Treasury yield curve from 5 to 30 years flattened Thursday to the lowest level since August 2007, as a combination of weaker-than-expected U.S. inflation and solid demand for a record bond auction bolstered investor confidence in owning long-dated securities.
The spread narrowed by more than 4 basis points, the most since February, dropping through a previous intraday low from April to 27.7 basis points. The gap between 2- and 10-year Treasuries also shrank in a bull flattening move.