Yields of longer-dated U.S. Treasuries extended their decline on Tuesday following a sharp overnight slump, pushing the two-year/10-year yield spread to a new 11-year low.
The benchmark 10-year Treasury note yield fell about 6 basis points to 2.498 percent, its lowest since Sept. 13.
The spread between two-year and 10-year yields continued to flatten and fell below 14 basis points, the flattest since July 2007. The yield curve has flattened as the Federal Reserve’s steady interest rate hikes send short-dated yields higher, while longer-dated Treasuries are supported by tepid inflation and slowing global growth.
The curve between three-year and five-year notes has inverted to a low of negative 1.2 basis points for the first time since 2007. It was the first part of the Treasury yield curve to invert since the financial crisis, excluding very short-dated debt.