The yield on the US 10-year Treasury is hovering around 4%, while the 2-year is sticking close to 3.5%. There's not much difference between the two, so the yield curve is pretty flat. The drop in the 10-year yield has been helped by a narrowing in the swap spread to the secured overnight financing rate (SOFR). It’s shrunk by more than 10 basis points, from the mid-50s to the low 40s. This shift started just before the release of the 2025 fiscal deficit, which came in slightly lower than the 2024 figure. It’s still high, but a bit lower -- a small positive. One reason for the improvement is higher tariff revenue, ... (full story)