Summary for the Week of October 23, 2026
- The 10-year Treasury yield fell 17 basis points (hundredths of a percentage point) Thursday to 4.96 percent, the most in a day since August 2024 (Treasury, FRED).
- Before Thursday, the 10-year had fallen more than 1 basis point on only one of 2026’s nine 2 percent Nasdaq drops.
- Futures still favor a Fed increase by December, at about 71 percent odds Friday after about 90 on Wednesday.
- Five-year inflation pricing rose to its highest since June as oil climbed; ten-year inflation pricing fell.
Treasury yields from three months to 30 years fell Thursday as the Nasdaq dropped 2.6 percent after Meta’s spending report. Thursday’s yield moves do not show whether investors were betting on a slower Fed or buying safety. The Fed decides Wednesday, and third-quarter GDP and September’s inflation report follow Thursday.
Treasuries rarely rallied on tech selloffs this year
From 2015 through 2019, the 10-year yield fell more than 1 basis point on 37 of the 46 days the Nasdaq dropped 2 percent or more. In 2022 and 2023, as the Fed raised rates, it did so on 16 of 51. Before Thursday, 2026 had nine such days; the yield rose on six and fell more than 1 basis point once, by 9 on February 12 (FRED, FRED). Nine days is a small sample.
Thursday’s selloff began with a company’s report, not with rising yields. Meta said Wednesday evening that it spent $34.9 billion on capital projects in the third quarter, leaving free cash flow at negative $2.1 billion, and raised the bottom of its 2026 spending range to $135 billion (Meta). Its shares fell about 7 percent, and the Nasdaq had its worst day since June 5.
Two investors split on whether bonds keep rallying. Michael Hartnett (Bank of America) wrote Friday that he is staying out of riskier assets until mid-November and expects a “down-in-yields, down-in-stocks, down-in US dollar trade” (Bloomberg via Yahoo Finance). Lance Roberts (RIA Advisors), whose firm recently added 20-year Treasuries, said Saturday the 10-year “should never have been at 5.3, 5.4,” blamed a premium for holding long bonds that was “way above normal,” and sees little more to gain (Thoughtful Money).
Futures still favor a December Fed increase
The two-year yield fell 16 basis points to 4.65 percent, and the five- and 10-year 17 each. Futures put an increase by December at about 90 percent Wednesday, BMO strategists noted (CNBC), about 78 percent Thursday afternoon (investingLive) and about 71 percent Friday (CNBC).
From Wednesday to Friday, a 19-point drop in the odds of one quarter-point increase is worth about 5 basis points, in line with the six-month bill’s decline. The two-year fell 12 over those two days, and the rest of its drop sits beyond December, where lower expected Fed rates and demand for safety move yields the same way. “It is a flight to safety,” Mitch Goldberg (ClientFirst Strategy) told CNBC Thursday (CNBC).
Five-year inflation pricing rose on the two days oil jumped
From Wednesday to Friday, the five-year Treasury yield fell to 4.82 percent from 4.95, and the inflation-adjusted yield on inflation-protected Treasuries (TIPS) to 2.34 from 2.55. The gap between them, investors’ five-year inflation pricing, rose 8 basis points to 2.48 percent, the highest since June 5 (Treasury real yields). Ten-year inflation pricing fell 3 basis points over the same two days.
The timing matches oil. Brent crude futures rose 4 percent Thursday after a New York Times report that the United States and Israel are considering resuming strikes on Iran after the November 3 midterms, and 3.1 percent Friday to $116.72 after Houthi attacks on Saudi oil installations (CNBC, Thursday and Friday). Households’ expectations rose too: 4.7 percent inflation over the next year and 3.5 percent over five to ten, both the highest since May, in the University of Michigan’s final October survey (Michigan, CNBC).
Treasury yields are near where September’s Fed increase left them
Since the Fed raised its target range to 3.75–4.00 percent on September 16 (Fed), the two-year yield is 5 basis points lower and the five-year 4 lower. The five-year inflation-adjusted yield is 17 lower, at 2.34 percent, because five-year inflation pricing rose 13. That is still above its August range of 2.04 to 2.18 percent, set before September’s run-up began.
Chair Kevin Warsh said in Bangkok on October 16, “I don’t prejudge meetings” (CNBC). Futures price no change Wednesday, and the meeting brings a statement and a press conference but no new projections.
Snapshot
Watching
- Tue Oct 27 — September new-home sales and durable goods orders. The consensus looks for a 660,000 sales pace and a 0.6 percent rise in orders.
- Wed Oct 28 — the FOMC decision and Warsh’s press conference. Futures price no change and about a 71 percent chance of an increase by December.
- Thu Oct 29 — third-quarter GDP and September PCE. The consensus looks for 3.2 percent growth and a 0.3 percent rise in core PCE prices.
- Tue Nov 3 — midterm elections and September JOLTS.
- Thu Nov 5 — 20 trading days after the October 7 10-year auction, which drew bids 2.77 times the amount sold, matching January 2016 and higher than any 10-year sale since. The 10-year closed at 5.28 percent on auction day and 5.00 percent Friday.
- Fri Nov 6 — October jobs.
Sources
Rates: Treasury par yield curve · Treasury real yield curve · 10-year and Nasdaq history, FRED DGS10 and NASDAQCOM · ICE BofA high-yield spread · Freddie Mac weekly rate history · Companies: Meta third-quarter results · Markets: investingLive, Oct 22 · CNBC, Oct 22, Oct 22 (BMO) and Oct 23 · AP via Yahoo Finance, Oct 23 index closes · Fed: September 16 statement · Warsh in Bangkok, CNBC · Surveys: University of Michigan Surveys of Consumers, October 2026 final results (Oct 23) · Labor: Labor Department claims via FRED · Voices: Lance Roberts, Thoughtful Money, Oct 24 · Michael Hartnett via Bloomberg/Yahoo Finance, Oct 23 · All-In, Oct 23 · Builds on the October 12 weekly.