The spread between 2-year and 10-year US Treasury yields is approaching its widest level in four years.

According to ME News, as of February 4th (UTC+8), the spread between the 2-year and 10-year US Treasury yields is currently around 69 basis points, approaching the four-year high of 74 basis points reached in April 2025. This spread has widened significantly over the past week from a recent low of 61 basis points. Investors are focusing on the US Treasury's quarterly refinancing plan, to be released later on Wednesday, for clues about the future scale of government debt issuance. The 10-year yield has been rising since the beginning of the year due to market uncertainty regarding debt issuance arrangements. Treasury Secretary Bessenter's goal of keeping yields low conflicts with the US fiscal situation and Warsh's nomination as Federal Reserve Chairman, who has previously expressed a desire to shrink the Fed's balance sheet. In contrast, the 2-year yield, which is more sensitive to monetary policy, has remained relatively stable. A steepening yield curve driven by rising long-term interest rates is often referred to as a "bear steepening" and is frequently interpreted as a signal of increasing fiscal pressure. Higher long-term yields will increase the government's debt burden, raise long-term borrowing costs, and may force the Treasury to rely more on short-term bonds, making the government more vulnerable to fluctuations in borrowing costs. (Source: ME)