Another day, another record low for the yield on the 10-year US treasury note. That is bad for banks. Making matters worse: the yield curve is flattening further.

The 10-year treasury yield fell to 1.367% on Tuesday, the lowest ever. At the same time, the difference between yields on the two-year and 10-year notes fell Tuesday to about 0.81 percentage point, its lowest level in more than eight years. The continuing downward march in yields is expected to render lending less profitable and drive down the income from securities that banks hold.