The key U.S. Treasury yield curve is sending warning signals; the era of higher interest rates may persist for a longer period.

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Golden Finance reports that on May 26th, a key U.S. Treasury yield spread indicator narrowed to its lowest level in a year, with traders increasing bets that the Federal Reserve may keep interest rates higher for a longer period under new Chair Kevin Woor.
The spread between 5-year and 30-year Treasury yields has narrowed to about 81 basis points, the lowest since May 2025.
This is an important indicator measuring investors' required premium for holding longer-term U.S. Treasuries.
This trend is mainly driven by selling off short-term U.S. Treasuries, which are more sensitive to changes in Federal Reserve policy expectations.
As of last Friday's close, the yield spread between 2-year and 30-year Treasuries also narrowed to its lowest level since July.
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