Inverted yield curve — January 2023
The new overnight federal funds rate is 4.6% as announced at 2PM February 1, 2023. This rate is controlled directly by the Fed and affects short-term treasury note rates.
Recent Treasury Note Rates
| 3-Month | 4.7% | Little discretionary influence | |
| 6-Month | 4.8% | Little discretionary influence | |
| 12-Month | 4.6% | Little discretionary influence | |
| 2-Year | 4.2% | Influenced by discretionary action | |
| 5-Year | 3.6% | Influenced by discretionary action | |
| 10-Year | 3.5% | Influenced by discretionary action | |
| 30-Year | 3.6% | Influenced by discretionary action |
Notes:
- The above rates depict an inverted yield curve, in which short-term notes pay higher interest rates than long-term notes. Make sense? Of course not.
- Treasury notes are traded on an open market, but the Fed can exert a significant influence!
- The 10-year note is the harbinger of 30-year mortgage rates.
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