June 2025 – Treasury Market Primer: Back to Textbook Basics?
Summary
As we enter the final weeks of Q2 – and at the risk of speaking too soon – several key markets may finish the quarter essentially unchanged from Q1. This seeming calm, however, obscures the roller-coaster of volatility investors endured in the first two months of the period. Equity markets and corporate credit spreads were whipsawed following tariff announcements from President Trump in early April, only to recover their footing by mid-May. In contrast, US Treasury yields remain elevated relative to their early-quarter levels. Notably, the yield of the benchmark 30-year surged nearly 50 basis points (bps) in a single week in April, the sharpest weekly increase since 1987. Whether these changes will ultimately register as meaningful in a historical context remains to be seen.