Will UST Par Yield Curve (2Y) for Q2 2026 be above 4.10%?

rationale:

The U.S. Treasury 2-Year Par Yield Curve Rate is currently hovering in the 4.11% to 4.16% range, just barely above the 4.10% threshold. With only three trading days remaining before the June 30, 2026, resolution and no major scheduled economic releases on the calendar (the July jobs report falls outside this window), volatility is expected to be confined to a tight 7-10 basis point range. Recent official prints show a mild downward glide over the past few days: 4.24% on June 22, 4.16% on June 23, and 4.11% on June 24 home.treasury.gov. Intraday quotes on June 25, following a subdued market reaction to the May PCE print of 4.1% year-over-year bea.gov, oscillated between 4.10% and 4.17% 55 sources. Importantly, the resolution relies strictly on a value 'above' 4.10% based on two-decimal official Treasury quotations home.treasury.gov. Because an exact print of 4.10% resolves negatively, this technicality slightly depresses the near-threshold probability. Given a starting point just marginally above the threshold, an outcome above 4.10% is evaluated at 58%—essentially a near coin-flip with a slight upward lean due to prevailing hawkish macroeconomic sentiment. Downside risks over this quiet three-day period are minimal. Falling below 4.00% would require an anomalous 11-15 bp rally absent major catalysts. Thus, thresholds at 3.90% and below are effectively certain (98-100%), and the probability for >4.00% remains highly robust at 91%. On the upside, while the 2-year par yield did hit 4.24% as recently as June 22, returning to those levels by June 30 would require a fresh hawkish shock or acute quarter-end liquidity pressure. Pushing above 4.20% requires a 7-9 bp selloff, warranting a 25% probability. More extreme upper tails (>4.30% to >4.50%) taper sharply into the single digits (9%, 4%, and 2%, respectively), as achieving these would demand an unexpected, severe macro or geopolitical shock in an otherwise quiet window. The primary uncertainty stems from the razor-thin margin separating current yields from the 4.10% cutoff. Even ordinary daily trading noise, a minor dovish sentiment shift, or oil price de-escalation over the remaining trading days could easily drag the yield a couple of basis points lower, failing the >4.10% condition. Conversely, hawkish Fed communication supporting the 3.8% median fed funds projection for 2026 federalreserve.gov provides the primary upside risk to push yields back toward the mid-4.20s.