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Study · FIVE · 2026-10-27 · 3 min read · Rates and housing finance · Futures

Two-year note sale clears at 4.708 percent before the Fed

The week's first note sale drew thinner bids than September's as the ten-year held at 5.00 percent, with the Fed decision Wednesday.

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

PHM Pultegroup, Inc.adjacent NVR NVR, Inc.adjacent

What changed since chapter nineteen

The Treasury sold $69 billion of two-year notes at a high yield of 4.708 percent on Monday 26 October, the first official record of the Fed's week since chapter nineteen. ^[2]

That compares with 4.787 percent at September's sale of the same size. Bidders offered $2.59 for every dollar of notes sold, against $2.63 in September. On the Treasury's Daily Treasury Par Yield Curve Rates, the ten-year stood at 5.00 percent on Monday 26 October, as on Friday 23 October. ^{[2, 4, 1]}

The record

On Monday 26 October the two-year was 4.68 percent against 4.69 on Friday, the five-year 4.84 against 4.82 and the seven-year 4.91 against 4.89. The thirty-year was 5.31 against 5.33. The curve is read from dealers' quoted bids near 3:30 p.m., not from trades, the Treasury says. ^[1]

The Treasury Auction Results for the 2-Year Note list $178.6 billion of bids for $69.0 billion of notes, which carry a 4-5/8 percent coupon. Half the accepted competitive bids came in at or below 4.655 percent. The notes are issued on Monday 2 November and mature on Tuesday 31 October 2028. ^[2]

Indirect bidders, customers bidding through a dealer or another bidder, took 45.7 percent of the competitive awards, against 57.8 percent in September. Direct bidders, who bid for their own account, took 41.3 percent against 29.0, and primary dealers 13.0 percent against 13.2. The shares are the desk's arithmetic on the Treasury's two results. ^{[2, 4, 5]}

The same day, $95 billion of 13-week bills cleared at a high rate of 4.050 percent, with $3.07 bid for every dollar sold. The Fed's target range has been 3.75 to 4 percent since its increase of Wednesday 16 September. ^{[3, 11]}

The Dallas Fed's Texas Manufacturing Outlook Survey of Monday 26 October reported its raw materials prices index at 55.3, against a series average of 28.1. Its finished goods prices index was 29.9 against 27.6 in September, and its wages and benefits index was 20.8, seven points lower. ^[15]

Freddie Mac's survey still stands at 7.32 percent for the 30-year fixed mortgage as of Thursday 22 October, against 6.19 percent a year earlier. Its next reading is published on Thursday 29 October at noon Eastern. ^[16]

Who it reaches

PulteGroup (PHM) is adjacent: its third-quarter release says 'the rapid increase in interest rates has stretched affordability even further'. Home sale revenues were $3.9 billion, 9 percent lower than a year earlier, the company reported. ^[18]

NVR (NVR) is adjacent as a builder and a mortgage lender. New orders were down 7 percent to 4,391 homes in the third quarter, and mortgage closed loan production was $1.38 billion, 10 percent lower, NVR reported. ^[19]

Where the sources disagree

On the figures they do not: RTTNews reported the same yield and bid-to-cover as the Treasury. It called the demand 'slightly below average', noting that the ten previous two-year sales averaged 2.62. CNBC's report of Monday 26 October was headlined that yields were little changed before the Fed's decision. ^{[17, 2, 20]}

The Treasury adds one caution: the indirect bidder category 'does not indicate the domicile of the bidder', though foreign monetary authorities bidding through the New York Fed are counted in it. On the record, the smaller indirect share is therefore not a measure of foreign demand by itself. ^[5]

What settles it next

On Tuesday 27 October, $54 billion of 52-week bills close at 11:30 a.m. and $70 billion of five-year notes at 1:00 p.m. Eastern. The Census Bureau's Advance Report on Durable Goods is due at 8:30 a.m., and New Residential Sales at 10:00 a.m., the same hour as the Conference Board's consumer confidence index, which read 81.9 in September. ^{[6, 7, 13, 14]}

On Wednesday 28 October, a $30 billion two-year floating-rate note closes at 11:30 a.m., and the Fed's calendar lists its decision at 2:00 p.m. with the chair's press conference half an hour later. On Thursday 29 October the BEA publishes GDP (Advance Estimate), 3rd Quarter 2026 and Personal Income and Outlays, September 2026, both at 8:30 a.m. Eastern. Then $44 billion of seven-year notes close at 1:00 p.m. that day. ^{[8, 10, 9, 12]}

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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