Happy July 5th!
The US Treasury yield curve has just flattened to BELOW 30 bps.
Yes, the 10-year Treasury note yield fell slightly while the 2-year Treasury note yield rose … again.
Notice that the zero coupon 2 year volatility has been declining as The Fed gradually raises rates.
And then we have Japan bailing on its Treasury holdings as well as China.
And Japan is going more into US equities and higher returning assets.
Yes, it is the short-end of the yield curve “where the action is.”