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U.S. Treasury Yields
This divergence in treasury yields reinforces what many were already thinking or feeling: the market is regaining long-term confidence in the US economy, but the short-term outlook is still uncertain or negative. Despite the split, short-term treasury funds have attracted more investor assets lately, according to fund flow data. Speculation is also growing on whether or not higher long-term treasury yields are here to stay, given the uptick in inflation. Long-term treasury rates tend to follow inflation, while shorter-term bonds are more sensitive to changes to the Federal Funds rate—hence their current near-zero rates.
![](https://static.twentyoverten.com/5da5d09edea73659b31600b8/wqg_ISrH54/treasury-rates.png)