2-Year Treasury Yield Gains Ground on the 10-Year

The 2-year yield is sensitive to rate-hike expectations Treasury yields have climbed sharply in 2026, with the 2-year hitting its highest level since January 2025 on Friday, Sept. 4, after a hotter-than-expected jobs report boosted expectations for a Federal Reserve rate hike. The 10-year yield, meanwhile, recently reached its highest level since November 2023. Using Daily Treasury Par Yield Curve Rates published by the U.S. Department of the Treasury, with data through Sept. 3, 2026, the 2-year yield stood at 4.34% on Sept. 3, up from 3.47% on Jan. 2, an 87-basis-point increase. The 10-year rose 58 basis points over the same period, to 4.77% from 4.19%. As a result, the gap between the two has narrowed from 72 basis points at the start of 2026 to 43 basis points. The shift has accelerated since Feb. 27, when the 2-year hit a 2026 low of 3.38%. Since then, it has jumped 96 basis points, compared with an 80-basis-point rise for the 10-year. The 2-year yield is particularly sensitive to expectations for Federal Reserve policy, while the 10-year also reflects longer-term inflation and economic growth expectations. For investors, the continued rise in yields bears watching, as higher Treasury returns can pressure equity valuations, particularly for growth stocks. As of this writing, the CME FedWatch tool is pricing in a 58.4% change for a rate hike in two weeks.