Key Takeaways
• Treasury Twist Jolts the Long Bond: While everyone seems to be downplaying the impact of the Treasury’s move to shift its funding to the shorter end of the curve, the bond market is treating this as big news. The long bond yield did something it couldn’t accomplish in response to the latest negative nonfarm payroll number or two months of benign inflation reports, dropping -9 basis points (to below 5.2% for the first time in nearly two weeks) — the biggest decline since February 12th and before that, October 10th, 2025. If you recall, the last time something like this was done, by Bernanke back in September 2011 (the Maturity Extension Program), the impact on bond yields when all was said and done was closer to -30 basis points.
