Cheap 10yr spreads

Research evidence excerpt

Cheap 10yr spreads

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Situation Room

Credit Analysis

Cheap 10yr spreads 22 June 2026

While the IG index spread has remained relatively stable since mid-May, on the curve Credit Strategy

10yr maturity has underperformed by about 3 to 4bps. That is likely driven by the big United States

bear flattening of the Treasury yield curve, most recently due to the hawkish June FOMC Cross Product

(Exhibit 3). Yuri Seliger

Credit Strategist

The flatter Treasury yield curve should have steepened the entire spread curve, but the BofAS

relative lack of 30yr supply and the strong yield-sensitive demand has kept the back end +1yuri.seliger@bofa.com646 855 7209

anchored (Exhibit 2, Exhibit 5). The demand apparently was not as strong at the 10yr Sohyun Marie Lee

point, leading to a 3bps steepening in the 5s10s spread curve so far in June (Exhibit 4, Credit Strategist

BofAS

Exhibit 1). As a result, 10yr spreads are trading at some of the cheapest levels vs. 5 and +1 646 855 7217

30yr spreads over the past three years (Exhibit 6). sohyun.lee@bofa.com

5s10s spread curve screen

In this reportAssuming the back end stays anchored by the strong yield-sensitive demand, the

cheapness of the 10yr maturity point should normalize over time. In Exhibit 7 below we Daily supply snapshot

screen for 5s10s spread curves that have steepened the most so far in June.

Daily dealer inventories update

Exhibit 1: 5s10s spread curve has steepened in June

The spread curve steepened despite stable overall spreads due to a flatter Treasury yield curve. Daily HG fund flows

135 Daily foreign demand tracker

5s10s non-fin spread curve (bps) 10yr spread (bps, RHS)

115 Link to notable research

32 Morning Market Tidbits: Change of

call: Fed to hike 75bp this year

27 Liquid Insight: Fed hawkish, stay paid