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.