By: Russ Kamp, CEO, Ryan ALM, Inc.

Despite FOMC action that reduced the Fed Funds Rate from 4.25%-4.50% to 3.5%-3.75%, the yield on the U.S. 30-year Treasury bond was higher at 12/31/25 (4.85%) than at year-end 2024 (4.79%). The Treasury yield curve became much steeper during the year as the spread between 2-year notes and 30-year bonds grew from 0.54% to 1.37%. Given the steepness in the YC, using a cash flow matching vertical slice for a portion of the pension plan’s liabilities will provide far greater cost reduction than a 100% CFM for a shorter period. Just something to consider as you look to remove some risk from your DB plan’s AA.