Why the 3-Month Yield Is Trapped Below the 10-Year

The yield curve is no longer inverted — but the 3-month Treasury yield has fallen behind the 10-year, raising questions about the Fed's control over short-term rates. As of June 10, 2026, the 3-month yield sits at 3.80 percent, while the 10-year is at 4.56 percent. That 76-basis-point gap suggests the market is pricing in rate cuts that haven't happened yet. Lucas and Luna unpack why the front end of the curve is behaving differently from the rest, what it means for Treasury's borrowing strategy, and how this dynamic ties into the broader fiscal outlook with federal debt at 38.5 trillion dollars and a deficit near 1.8 trillion. They also explore how household financial anxiety — at its highest since July 2022 — is reinforcing demand for short-dated paper, keeping yields low despite the Fed's steady stance. This episode offers a concrete look at a structural shift in the government bond market that most coverage glosses over. #ThreeMonthYield #YieldCurve #TreasuryBorrowing #FederalDebt #FedPolicy #ShortTermRates #BondMarket #FixedIncome #Economics #FiscalOutlook #Deficit #Inflation #InterestRates #CentralBanking #FexingoBusiness #BusinessPodcast #NationalDebtPodcast #LongTermFiscalHealth Keep every episode free: buymeacoffee.com/fexingo