Treasury Curve Flashes Higher-for-Longer Warning Under Warsh (2)

A key Treasury yield gap shrank to its tightest level in a year as traders ramped up bets the Federal Reserve may keep interest rates higher for longer under new chairman Kevin Warsh.

The spread between five-year and 30-year yields — a closely watched gauge of the premium investors demand for holding longer-dated debt — narrowed to 81 basis points on Friday, the lowest since May 2025, before rebounding to around 82 basis points on Tuesday as cash trading resumed after a US break.

The move is driven mainly by a selloff in shorter-dated Treasuries, which are more sensitive ...