The Ten-year Treasury has been all over the place in the past few days, as the yield curve continues to flatten.

There have been wild intraday swings as well as - of course - movement within the past few days.

Thirty Capital Analyst Bryan Kern says: "We've seen a ton of volatility, but obviously the general trend is upwards."

The Two-year was up 16 bps and the Ten-year 18 bps, briefly touching 2.50 on Friday. In the last two weeks the Ten-year is up about 32 bps and about 42 bps on the Two-year.

Ten-year artificially low because of quantitative easing

Bryan believes that the Ten-year should be much higher than what it is, given all the qualitative easing that happened during the pandemic.

Bryan says he doesn't see a recession in the next 12 to 18 months, despite there being a lot of talk about an impending recession in the news.

"I believe the Ten-year is artificially low because of quantitative easing," he says. "Realistically, we shouldn't be anywhere near an inverted curve with what's going on.

"Once the Fed stops buying treasuries, and if they actually quantitatively tightened, we'll see that Ten-year spike," Bryan continues.

He adds that there is a 75 percent chance of a 50-bps hike in May, and that it is likely the Ten-year will head higher, with the floor for the next quarter at 250.

Sticker shock on some SOFR pricing

Thirty Capital analyst Jay Saunders says some clients are experiencing sticker shock on some of the pricing of deals.

Looking at SOFR swap rates, three-year SOFR swap rates were up 36 bps last week.

The highest point on the SOFR swap curve right now is a three-year SOFR swap. It's the high-rate, high benchmark on the curve. From there, it goes downhill, all the way out to 30 years.

Jay adds that the Three-year treasury has increased 144 bps in the first quarter of 2022. That's the largest move up in the Three-year treasury in 50 years.

The short-end of the rate curve is very reactive to the Fed

Jay says commercial real estate borrowers can expect to see all the rates creep up as the next Fed meeting nears.

Short-term rates have pulled in the last Fed increase. One-month LIBOR is now trading at 45 bps, one-month SOFR at 31 bps, while the three-month LIBOR is one percent.

He adds that while many analysts are predicting high rate increases, he believes the Fed will be more measured with interest rate hikes.

"Clearly the market's anticipating short-term rates going up quite a bit and that's forcing the short-end of the curve up. The long-end is just not keeping up."

He adds that commercial real estate clients are concerned about where rates are going, and are prudent when it comes to buying rate protection.

You can hear the full update, news, and analysis by listening to the full episode. Be sure to follow Thirty Capital CEO Rob Finlay on Twitter and LinkedIn.