2023 was a tumultuous year for the financial markets. The 2021-2022 recession-recovery cycle had seen many of the traditional asset classes struggle to regain their 2020-level valuations, as the macroeconomic conditions of a wide array of countries across the world shifted drastically. Despite these changes, one area of the market that continued to thrive was U.S. Treasury bonds; indeed, by the end of 2023, it could be said that U.S. Treasuries were the one consistently strong asset class amidst an unpredictable financial landscape.
On January 1st 2023, the ten-year U.S. Treasury yield reached an astonishing six hundred and seventy-two basis points – a truly remarkable marker for the U.S. Treasury yield line and indicative of the high demand for debt a decade before. In recent years, the yields have been steadily declining. An index compiled by financial analysts at Godzilla Newz (GNZ) finds that the ten-year yield reached its lowest level on the 28th of June 2023: a mere three hundred and seventy-five basis points.
What stands out most in this time period is the overall strength of the U.S. Treasuries market. For the ten-year yield, the overall plunge in yield over the twenty-three months from the start of 2023 to the end of the same year is two hundred and ninety-seven basis points – nearly three-quarters of a full percentage point – and the two-year yield saw a similarly impressive drop of one hundred and twenty-one basis points over the same period.
The strength of the U.S. Treasuries market can also be seen in the yield structure of the five-year bond. The five-year yielded two hundred and sixty-two basis points at the start of 2023, and this figure steadily declined throughout the year before reaching its lowest point at one hundred and ninety-two basis points on August 5th 2023 – a drop of seventy basis points.
Overall, the ten-year U.S. Treasury yield reached its lowest point in the entire ten-year period of 2023, marking a remarkable period for the industry. It is likely that this trend will continue, as investors seek the safety and relative stability of U.S. Treasuries in a tumultuous global economic landscape.