The Treasury Building in Washington, with the Washington Monument behind it, photographed in July 2015 · MeanieHyaena, via Wikimedia Commons · CC BY 4.0

Study · FIVE · 2026-09-27 · 8 min read · Treasuries, the Fed and housing finance · World and macro

The thirty-year hits a 2002 high as the Fed talks of another rise

Treasury's daily table puts Thursday's ten-year close at 5.18 percent, above any day since 6 July 2007, and Friday's thirty-year at 5.49 and twenty-year at 5.54, the highest since 2002 and 2004; the week's three note auctions cleared at 4.787, 5.033 and 5.085 percent; John Williams called another increase by year-end 'reasonable', Anna Paulson said 'some modest further tightening may be warranted', and Friday's Michigan survey put year-ahead inflation expectations at 4.6 percent. Next: PCE and GDP on Wednesday, the jobs report on Friday 2 October, the Fed on 27 and 28 October.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

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What changed since chapter one

Chapter one, on 17 September, left the ten-year Treasury yield at 5.01 percent on the day the Fed raised its rate. In the seven sessions since, Treasury's daily par yield table, the rate at which a new Treasury of each length would sell at its face value, shows the ten-year at 4.94 percent on the 17th, 5.01 on the 18th, 4.96 on the 21st and 22nd, 5.11 on the 23rd, 5.18 on the 24th and 5.17 on Friday the 25th. Over the same days the two-year moved from 4.67 to 4.81, the five-year from 4.78 to 4.98, the twenty-year from 5.32 to 5.54 and the thirty-year from 5.29 to 5.49. ^[1]

On Friday the ten-year traded as high as 5.23 percent during the day, CNBC reported, calling it the highest since 2007 and noting the yield had been just below 4.8 percent earlier in the month; CNBC's Friday market note put the thirty-year briefly at 5.53 and the two-year above 4.90 at one point. Treasury's table records closes, not the day's highs, and its closes are the figures this series keeps. ^{[9, 10, 1]}

The three note auctions of the week set the price of new debt. By TreasuryDirect's results, the two-year note on Tuesday 22 September sold 69 billion dollars at a high yield of 4.787 percent with bids of 2.63 times the amount sold, the five-year on Wednesday sold 70 billion at 5.033 percent with bids of 2.21 times, and the seven-year on Thursday sold 44 billion at 5.085 percent with bids of 2.42 times. ^{[5, 6, 7, 8]}

The record

Read against Treasury's own tables back to 1990, Thursday's ten-year close of 5.18 percent stands above any close since 6 July 2007, when the table shows 5.19. Friday's thirty-year close of 5.49 is the highest since 9 January 2002, when it shows 5.51; Treasury published no thirty-year rate from February 2002 to February 2006, so the comparison skips those years. Friday's twenty-year close of 5.54 is the highest since 14 June 2004, when the table shows 5.59. ^{[1, 2, 3, 4]}

The Fed's side of the record: on 16 September the committee raised the target range for the federal funds rate by a quarter point to 3.75 to 4 percent by a vote of 12 to 0, saying 'Inflation remains elevated' and that the action 'will support a timelier return to the Committee's 2 percent goal'. Its projections that day put the median federal funds rate at 4.1 percent at the end of 2026 and of 2027 and 3.9 percent at the end of 2028, PCE inflation at 3.7 percent this year and 2.3 percent next, core PCE at 3.4 and 2.5, unemployment at 4.1 percent through 2028 and growth at 2.3 percent this year. ^{[11, 12]}

The committee's voices since. Anna Paulson, president of the Philadelphia Fed, said on Thursday that underlying inflation 'is running in a range of about 2.5 to 3 percent, well above our 2 percent target', that she supported the September increase, and that 'if conditions evolve as I expect, some modest further tightening may be warranted'. John Williams of the New York Fed said the same day that investors' expectation of another increase by year-end 'seems to me a reasonable way of thinking about it. But we have to see,' and that the time for explicit forward guidance was 'over'; CNBC's account also carried Susan Collins's warning of 'an increased likelihood' that inflation stays 'notably' above 2 percent and Michael Barr's 'further policy adjustments are likely to be needed'. CME's FedWatch tool, as CNBC reported it, put the odds of an October increase at 77.5 percent on Thursday, up from about 53 on Wednesday, and at 64 percent on Friday. ^{[13, 14, 9]}

The expectations behind the move: the University of Michigan's final September survey, published on Friday, put its index of consumer sentiment at 48.1, year-ahead inflation expectations at 4.6 percent, up from 4 percent in August, and long-run expectations at 3.4 percent; the survey's director said sentiment was 'down 15% from January 2026'. ^{[15, 9]}

Where the supply of bonds comes in: CNBC's Friday explainer quoted Thierry Wizman of Macquarie Group saying 'this year it has more to do with the bond issuance than the inflation story', with the government financing a large deficit while companies borrow for artificial intelligence infrastructure, and cited Vanguard's estimate that Alphabet, Amazon, Meta, Microsoft and Oracle issued about 132 billion dollars of debt through July, against an annual average of about 35 billion in 2020 to 2024. ^[9]

Who it reaches

The mortgage first. Freddie Mac's survey of 24 September put the 30-year fixed rate at 7.03 percent, up from 6.95 a week earlier and 6.30 a year earlier, and the 15-year at 6.42; Mortgage News Daily's daily average reached 7.45 percent this week, its highest in more than two years, CNBC reported. ^{[16, 10]}

Lennar's results of 16 September carry the chain in the builder's own words: 'Mortgage rates increased through the quarter, with the 30-year rate at approximately 6.8% at quarter end', incentives of about 12 percent on an average sales price of 372,000 dollars, and full-year deliveries moderated to 80,000 to 81,000 homes from 82,000 to 83,000 'given continued pressure on interest rates and the deterioration in market conditions through the quarter'. ^[17]

The paths from chapter one hold: the homebuilders whose buyers borrow at these rates (Lennar, D.R. Horton, PulteGroup, Toll Brothers, KB Home), the mortgage lenders whose volume follows them (Rocket, UWM), the banks whose lending margins the curve sets (JPMorgan, Bank of America, Wells Fargo, U.S. Bancorp), and the mortgage real estate investment trusts whose holdings are priced off the same curve (AGNC, Annaly). ^{[16, 17, 1]}

Where the sources disagree

On the high itself. CNBC's 5.23 percent is a print during Friday's trading; Treasury's table closes Friday at 5.17, a basis point below Thursday's 5.18, so on the official record the week's high is Thursday's close. On the odds of an October increase, the same tool read 53 percent on Wednesday, 77.5 on Thursday and 64 on Friday in CNBC's two reports, which is the market changing its mind day to day rather than a disagreement between sources. ^{[9, 10, 14, 1]}

On the cause. Wizman's issuance reading and the Fed presidents' inflation reading are not exclusive of each other; the committee's own statement of 16 September names neither oil nor energy, while Paulson's speech names 'shocks from tariffs and high energy prices' as what output growth has withstood. ^{[9, 11, 13]}

What settles it next

The dated documents. Treasury's table every business day. The Bureau of Economic Analysis publishes August personal income and outlays, with the PCE price index the Fed's projections are written in, and the third estimate of second-quarter GDP on Wednesday 30 September at 8:30 in the morning. The Bureau of Labor Statistics publishes the September employment report on Friday 2 October at 8:30 and the October report on 6 November. The Fed meets on 27 and 28 October without a new set of projections and on 8 and 9 December with one. CNBC's market note said the jobs report is expected to show payrolls roughly halving to 85,000 from 162,000 in August with unemployment steady at 4.1 percent, an expectation that is the survey's, not the desk's. ^{[18, 19, 20, 10]}

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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