Chart 1: The Yield Curve Has Steepened Considerably

A line graph that shows the yield curve of constant maturity Treasury rates in November 2007, November 2008, and November 2009. The Treasury rates include 3-month, 6-month, and 1-year bills; 2-year, 3-year, 5-year, 7-year, and 10-year notes; and 30-year bonds. In November 2007, there was only about a percentage point of difference in the yield rates of the 3-month bill (3.6%) and the 30-year note (4.4%). However, by November 2008 the yield rates had diverged sharply, with the 3-month rate down to approximately 0.5 percent and the 30-year rate slightly higher than the previous year at 4.5 percent, a gap of almost 3 percent. The yield rates of other Treasury bills and notes had dropped as well, though the differences were less significant for the 7-year and 10-year notes. By November 2009, the curve had widened further, with the 3-month rate at nearly 0.2 percent and the 30-year rate around 4.0 percent. The source of this information is the U.S. Department of the Treasury.