Macrolyzed

This week

written Oct 9, 2026 · updated weekly

High safe yields favor cash, TIPS and after-tax munis; expensive, narrow US stocks, long bonds and rate-sensitive assets stand to lose if rates keep rising.

4 things to know
Safe yields now beat what stocks are priced to return, and after tax, munis edge Treasuries in top brackets.
  • Stocks' real extra return over TIPS is -0.47%: the 2.46% ten-year earnings yield is below the guaranteed 2.9% 10-year real yield (TIPS).
  • Tax-free muni yield (national) of 3.40% matches about 5.4% taxable in the top federal bracket, edging the 5.3% 10-year Treasury; state funds add more.
  • Caveat locking long yields risks price losses if rates rise further; a 30-year bond loses roughly 15% of its price per point of yield rise.
The Fed raised rates into a stalling job market, with an oil shock keeping inflation above its target.
  • Fed's policy rate rose to 3.8% in September, the first hike since 2023, with inflation (PCE, yearly) at 3.7% against a 2% target.
  • Total jobs (nonfarm payrolls) added just 29,000 in September; the quits rate at 1.9% says bargaining power sits with employers.
  • Oil (WTI) at $92 is up 60.2% year-to-date on a supply shock; gasoline at $4.35 a gallon is up 54.9% year-to-date.
Rising long yields are repricing everything rate-sensitive at once: bonds, small stocks, property and mortgages.
  • The 10-year Treasury yield at 5.3%, up 47 basis points (hundredths of a percent) in a month, is its highest since 2002.
  • One month: broad bond fund -2.1%, US small companies -3.6%, real estate funds (REITs) -5.4%, 30-year mortgage rate up 57 basis points to 7.3%.
  • Cash (3-month Treasury yield) pays 4.2% against 3.7% inflation: a real return while waiting, rare over the last twenty years.
Index gains sit in a few large tech companies while most stocks fall, and the calm fear gauge hides it.
  • Tech-heavy stocks (Nasdaq-100) rose 5.9% in a month while US small companies fell 3.6%, mid-size 2.1% and developed-world ex-US 3.3%.
  • An S&P 500 index fund is increasingly a bet on that handful of companies, not the broad economy.
  • Market fear gauge (VIX) at 15.7 is calm, below its 10-year average of 18.7, despite the correction beneath the surface.
Indicator As of Latest 1Y change vs avg History This week
Unemployment rate Jobs September 2026 4.2% ▼ -20 bps +24 bps
Hiring nearly stalled in September even though layoffs stay rare: a low-firing, low-hiring job market.
  • Total jobs (nonfarm payrolls) rose just 29,000 in September, well below forecasts; prior months were revised down a combined 60,000.
  • Unemployment rate rose to 4.2%, partly from more people entering the labor force; jobless claims at 197,000 stay very low.
  • Average hourly pay growth of 3.0% yearly is the slowest since May 2021 and trails 3.7% headline inflation: a real pay cut on average.
  • Quits rate at 1.9% and job openings down 6.1% in a quarter say bargaining power for raises and job moves sits with employers.
Total jobs (nonfarm payrolls) Jobs September 2026 159,044 +0.3% +1.9%
Jobless claims (weekly) Jobs 10/3/26 197,000 ▼ -15.5% -10.7%
Recession signal (Sahm rule) Jobs September 2026 0.00 ▼ -100.0% -100.0%
Job openings Jobs August 2026 7,079 ▲ +2.3% -19.7%
Quits rate Jobs August 2026 1.9% ▼ -10 bps -41 bps
Average hourly pay Jobs September 2026 $37.8 ▲ +3.0% +9.4%