Most movements in the yield curve are parallel, so the correlations between different Treasury maturities and the S&P 500 will show strong co-movement. When the yield curve changes shape, likely due to a revision in monetary policy, there will be a dislocation in correlation co-movement. We are seeing this in the 2025 correlations. There is a positive correlation between 30-year Treasuries and the SPX, while there is a negative correlation for 2, 5, and 10-year Treasuries. We expect that these will converge in 2026 as the Fed stabilizes its monetary policy.
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