Goldman Sachs: US Treasury yield curve resembles zero interest rate era.

Goldman Sachs interest rate strategists said that 5-year US Treasury bonds have never been so expensive compared to bonds of other maturities, except for when the Federal Reserve lowered rates to zero that year. On Wednesday, the 5-year yield remained at about 3.78%, still near the high range since early 2022, when the Fed's federal funds rate target range bottomed out at 0%. However, a common bond relative value calculation shows that the valuation of 5-year bonds is at historically high levels. "A defining feature of the US Treasury market is the overvaluation of 5-year bonds, as it has been in the past and still is now," strategists William Marshall and Bill Zu wrote in a report on August 5. Their benchmarks are the 2-year and 30-year Treasury bond yields.