Yield curve steepens as long-term rates jump

Despite a rally in the long-end of the Treasury yields curve, the Fed's effort to stimulate the economy through asset purchases and discount rate decreases has kept the short-end lower. The spread between 2-year and 10-year Treasury yields was 62 basis points, a 26-basis-point increase from a week ago. Meanwhile, the spread between the 2-year and 30-year yields was 92 basis points, a weekly increase of 29 basis points.

High-grade corporate bonds yields rallied as well and at a much more rapid pace then their Treasury counterparts. At close of business Thursday, 10-year A-/A/A+ corporates were yielding 3.44%, up 114 basis points over the past week. The spread between the two was 250 basis points Thursday. Rallying corporate yields may offer some relief to corporate pension liabilities, partially offsetting declines in their assets.