Summary for the Week of October 9, 2026
- Treasury sold $39 billion of 10-year notes on Wednesday at 5.30 percent, 47 basis points (hundredths of a percentage point) above September’s sale (TreasuryDirect).
- Dealers required to bid at every auction won 2.5 percent of the notes, their smallest share at a 10-year auction since at least 2009.
- The 10-year closed at 5.31 percent on Monday, its highest since May 2002, and ended the week at 5.24, 4 basis points below the prior Friday (Treasury).
- Most Fed officials expected another increase by year end, the September minutes show; futures put October 28 odds near 20 percent through Wednesday.
Bids totaled $108 billion for $39 billion of 10-year notes on Wednesday, about half of them from dealers required to bid. Auctions that beat the average of the sales before them have been followed by a higher 10-year yield a month later about as often as a lower one.
Dealers won 2.5 percent of the 10-year sale
Primary dealers, the banks required to bid at every Treasury auction, bid for $52.9 billion of the notes and were awarded $984 million, because other bidders offered to accept lower yields. Bidders through intermediaries, including foreign central banks and domestic funds, won 80.3 percent. Bids were 2.77 times the amount sold, matching January 2016 and higher than at any auction since.
The dealer share is the lowest of 215 auctions in TreasuryDirect’s records back to 2009, and it is the latest point in a 17-year decline. Dealers won 58 percent of the average 10-year sale in 2009, 26 percent in 2019 and 8.7 percent this year. Wednesday’s share was 71 percent below the 8.8 percent average of the prior six sales, a gap matched only in February 2023.
Thursday’s 30-year bond sale drew weaker bidding than September’s: bids of 2.54 times the amount sold, against 2.61 (TreasuryDirect).
Yields rose after strong auctions as often as they fell
Joseph Wang (Fed Guy) said Saturday that the 10-year sale put a “soft ceiling” on yields “for the moment” (Markets Weekly). The auction record shows an effect on auction day and none a month later.
In 208 such auctions since mid-2009, bids stronger than the average of the prior six sales went with a yield about 1 basis point lower on auction day. Twenty trading days later the correlation is 0.03, where 0 is no relationship and 1 a perfect one. The yield was lower 20 trading days after nine of the 20 strongest auctions. The 10-year moved more than 13 basis points in half of those 20-day spans, so the test would miss an effect of a few basis points.
At 60 trading days the correlation is −0.14, slightly lower yields after strong sales. In the 45 auctions since 2023 it is 0.42 at 20 days, a higher one. September 9’s sale drew bids of 2.71 times the amount sold; the 10-year closed that day at 4.83 percent and 20 trading days later at 5.28.
The 10-year closed 1 basis point higher on Wednesday. Thursday’s 6-basis-point drop came on a day with the 30-year sale, a speech by Governor Christopher Waller and President Trump’s statement that the United States would not attack Iran before the midterms (CNBC).
Most officials expected one more increase; Waller anticipates more
“Most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” say the September 15–16 minutes, released Wednesday (Fed). Officials met two weeks before the Bureau of Economic Analysis revised July’s 12-month core inflation in the Fed’s preferred measure down to 3.0 percent from 3.3 (BEA).
Waller, speaking Thursday after that revision, said he sees the economy “in roughly the same place” as in September and, if the data come in as expected, anticipates “additional hikes” that “do not need to come at consecutive meetings” (Fed). He cited futures prices from Wednesday: an 85 percent chance of at least one increase by December and nearly 80 percent of at least two by March. Odds of an increase on October 28 were about 18 percent Monday and 20 Wednesday, from 23 the prior Friday (CNBC, Oct 2, Monday and Wednesday).
Cook’s removal hearing follows the October Fed meeting
Governor Lisa Cook votes at the October 27–28 meeting. A presidential memorandum dated October 7 and published Friday names three presidential appointees to report whether there is “cause” to remove her over alleged false statements on mortgage documents, which she denies, with a closed hearing on November 5 (White House). The Supreme Court blocked President Trump’s first attempt to remove her in June (CNBC); the memorandum cites that ruling for the meaning of “cause.”
Snapshot
Watching
- Tue Oct 13 — September existing-home sales; JPMorgan, Goldman Sachs, Citigroup and Wells Fargo report earnings.
- Wed Oct 14 — September CPI. The last consumer-price report before the October 28 meeting. The New York Fed’s survey put households’ one-year inflation expectation at 3.9 percent in September, its highest since May 2023; the five-year was unchanged at 3.0 (New York Fed).
- Thu Oct 15 — September PPI and retail sales; Chair Kevin Warsh speaks in Bangkok at 11:30 p.m. Eastern, his first scheduled appearance since the September press conference.
- Wed Oct 21 — 20-year bond auction.
- Wed Oct 28 — the FOMC.
- Thu Nov 5 — 20 trading days after the 10-year auction, the horizon tested above. The 10-year closed at 5.28 percent on auction day; a higher close would repeat September.
Sources
Auctions: TreasuryDirect results for the 3-year, Oct 6, 10-year, Oct 7 and 30-year, Oct 8 · auction history, TreasuryDirect · Rates: Treasury par yield curve · Treasury real yield curve · 10-year history, FRED DGS10 · New York Fed ACM term premium · Freddie Mac weekly rate history · Fed: September minutes · Waller, Oct 8 · BEA, August PCE · Cook memorandum and CNBC, Oct 9 · October odds: CNBC, Oct 2, Oct 5 and Oct 7 · CNBC on Oct 8 · Surveys: New York Fed Survey of Consumer Expectations · EIA retail fuel prices · Voices: Joseph Wang, Markets Weekly, Oct 10 · Mohamed El-Erian, Oct 11 · Builds on the October 4 weekly.