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“Strong” economic activity keeps Fed hawkish: The Federal Reserve held the Fed Funds target range at 3.75%–4.00% on Wednesday, following September’s quarter point rate hike. Governor Lisa Cook, in her first dissent since joining the Fed in 2022, and Cleveland Fed President Beth Hammack voted for another quarter-point hike. The statement upgraded its description of economic activity to “strong” from “solid” and said inflation “remains elevated,” yet Chairman Warsh declined to commit to a possible December decision, calling the period ahead “information rich.” He also announced that, starting in 2027, one of the Fed’s eight meetings will focus on strategy with no rate decision. Thursday’s macroeconomic data did not change the picture. Q3 GDP grew at a 3.4% annualized rate (Est. 3.2%, Prev. 2.2%), the fastest pace in a year, with consumer spending up 3.8% (Est. 3.4%) and final sales to private domestic purchasers up 4.9%, the fastest since the second quarter of 2021. September Personal Consumption Expenditures (PCE) rose 3.6% YoY (Est. 3.6%, Prev. 3.4%) and core PCE) and.1% YoY (Est. 3.1%, Prev. 3.0%)) and remained markedly above the Fed’s 2% target. Beneath the headline, real consumer spending was flat in September (Est. +0.1%) and the saving rate fell to 3.8%, its lowest since 2022, as households drew on savings to keep spending. Energy remains the swing factor for inflation: Brent crude oil settled over $117 a barrel on Friday, 20% higher during the month of October as rumors swirl of resumption of a potential military campaign in Iran after the midterms

October brought tricks and treats for Treasuries: The 10-year yield peaked at 5.36% intraday on October 7^th, its highest level in more than two decades, and closed the month at 4.93%. That is 35 bps below its September 30th close (5.28%) and about 43 bps below that intraday high. Two sessions, October 15^th (-13 bps) and October 22^nd (-17 bps), account for about 29 bps of the monthly decline, and both coincided with technology-led equity selloffs. Since October 22^nd, the 10-year has held a 4.93%–5.02% range, even as Brent crude rose about 20% over the month. Fed Chair Warsh flagged that decoupling on Wednesday, saying interest-rate reactions to rising oil prices “have rolled over to the downside.” The 2-year fell 30 bps in October to 4.59%, the 5-year fell 37 bps to 4.72%, and the 30-year fell 32 bps to 5.31%, leaving the 2-to-10 curve at about 34 bps, roughly 20 bps flatter than its October 8^th intraday peak of about 54 bps. Alongside the Fed meeting, last week’s Treasury market movements were led by equity markets. Thursday brought another tech sector “safe haven” rotation, with Alphabet shares falling about 10%, which Bloomberg described as the stock’s biggest-ever market-value wipeout. The long end still carries a fiscal premium, as publicly held federal debt reached 100.03% of GDP at fiscal year-end, the highest since 1946, and the 10-year sits about 41 bps above its 2026 average of roughly 4.52%.

October at a glance: Treasury levels through October 30th (closes vs. intraday highs)

Source: Bloomberg, BWE.

Credit spreads stand still despite elevated activity: Fannie Mae DUS/MBS new issue investor spreads were roughly unchanged on the week. They sit within 1 bp of where October began, so the roughly 35 bp decline in the 10-year Treasury yield flowed through to note rates. Fannie Mae DUS/MBS rate lock volume for new issuance last week was approximately $1.2 billion, up from roughly $700 million last week. Ginnie Mae Permanent Loan (PL) and Construction Loan (CL) credit spreads widened again, with generic PL at its widest level of 2026. In corporate credit, the CDX Investment Grade 5-year index closed the week at 62 bps, about 1-2 bps tighter than the prior Friday. Investment grade supply remains heavy, already topping its highest annual new issuance volumes ever last week and totaling over $1.78 trillion issued in U.S investment grade corporate paper this year. Microsoft headlined investment grade bond sales least week with at least $25 billion, its first major bond issuance since 2017, and Bloomberg reported that global bond sales – which incorporates governments, companies, and financial institutions – have reached a record $6.61 trillion this year, with cloud and data-center borrowers accounting for about $368 billion.

The week ahead: U.S. Midterm elections kickoff an active macroeconomic data week on Tuesday. Morgan Stanley expects Democrats to regain the House and views the Senate as a toss-up with a slight Democratic edge at the time of this writing, and it sees the election alone as unlikely to substantially change the longer-term outlook for interest rates or for the U.S. deficit. BMO notes that a Democratic Senate would raise the odds of a spending deal, an incrementally bond-bearish outcome, and investors remain wary that the U.S. could resume strikes on Iran after the vote. Tuesday’s JOLTS job openings are expected at 7.162 million (Prev. 7.079 million). Wednesday brings the Treasury’s Quarterly Refunding Announcement alongside ADP (Est. 66K, Prev. 90K) and ISM Services (Est. 54.8, Prev. 54.9), with the prices paid component expected at 75.0 (Prev. 74.0). Friday’s October jobs report is the main event: Nonfarm Payrolls are expected at 65K (Prev. 29K) with the Unemployment Rate unchanged from the prior month at 4.2%. Officials will see two labor reports and one more month of inflation reports before the last FOMC Rate Decision Meeting of the year on December 8–9^th. 

Economic Calendar: (Week of 11.02.2026 – 11.06.2026):

11/3: Tuesday

• U.S. Midterm Elections
• Sep: JOLTS Job Openings (Est. 7,162K, Prev. 7,079K)
• Sep: JOLTS Quits Level (Est. 3,100K, Prev. 3,066K)
• Sep: JOLTS Layoffs Level (Est. 1,686K, Prev. 1,641K)
• Sep: Factory Orders (Est. 1.2%, Prev. 0.1%)
• Sep F: Durable Goods Orders (Prev. 1.8%)

11/4: Wednesday

• Oct: ADP Employment Change (Est. 66K, Prev. 90K)
• U.S. Treasury Quarterly Refunding Announcement
• Oct F: S&P Global US Services PMI (Est. 57.9, Prev. 57.9)
• Oct F: S&P Global US Composite PMI (Prev. 57.6)
• Oct: ISM Services Index (Est. 54.8, Prev. 54.9)

11/5: Thursday

• Oct: Challenger Job Cuts Total (Prev. 43,281)
• Week of Oct 31st: Initial Jobless Claims (Est. 196K, Prev. 194K)
• Week of Oct 31st: Initial Claims 4-Wk Moving Avg (Prev. 196.75K)
• Week of Oct 24th: Continuing Claims (Est. 1,710K, Prev. 1,701K)

11/6: Friday

• Oct: Change in Nonfarm Payrolls (Est. 65K, Prev. 29K)
• Oct: Two-Month Payroll Net Revision (Prev. -60K)
• Oct: Unemployment Rate (Est. 4.2%, Prev. 4.2%)
• Nov Prelim: U. of Mich. Sentiment (Est. 48.0, Prev. 48.0)
• Nov Prelim: U. of Mich. 1 Yr Inflation (Est. 4.7%, Prev. 4.7%)
• Nov Prelim: U. of Mich. 5-10 Yr Inflation (Est. 3.5%, Prev. 3.5%)
• Sep: Consumer Credit (Est. $13.0B, Prev. $8.281B)