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
US stock market (S&P 500) Stocks 10/8/26 7,765 ▲ +15.3% +45.5%
A few AI-linked giants carry the indexes while most stocks fall, and valuations leave no cushion over safe bonds.
  • S&P 500 up 2.2% and Nasdaq-100 up 5.9% in a month on AI-related stocks; 83% of S&P members trade over 10% below their 52-week highs.
  • Shiller CAPE (10-year P/E) at 40.6 versus a long-run average near 17; readings above 30 have preceded a decade of below-average returns.
  • Earnings yield on 10-year profits at 2.46% sits below the 2.9% 10-year real yield (TIPS): stocks are priced to return less than safe bonds.
  • Market fear gauge (VIX) at 15.7 is calm; insurance against a swing is cheap by the market's own pricing.
Tech-heavy stocks (Nasdaq-100) Stocks 10/8/26 30,726 ▲ +22.4% +64.2%
Market fear gauge (VIX) Stocks 10/9/26 15.2 ▼ -29.7% -20.3%
US mid-size companies Stocks 10/8/26 $73.0 ▲ +13.6% +29.0%
US small companies Stocks 10/8/26 $137.3 ▲ +17.9% +28.7%
Developed-world stocks (ex-US) Stocks 10/8/26 $69.9 ▲ +18.9% +43.6%
Emerging-market stocks Stocks 10/8/26 $59.1 ▲ +10.9% +35.4%
Shiller CAPE (10-year P/E) Stocks September 2026 40.6 ▲ +5.2% +18.4%
Earnings yield on 10-year profits (CAPE) Stocks September 2026 2.46% ▼ -13 bps -50 bps
Stocks' real extra return over TIPS Stocks September 2026 -0.47% ▼ -126 bps -201 bps
Private equity (listed funds) Stocks 10/8/26 $55.90 ▼ -14.1% +5.0%
Corporate profits growth Stocks Q2-2026 26.6% ▲ +2,745 bps +1,670 bps
Corporate profit margins Stocks Q2-2026 13.1% ▲ +211 bps +146 bps
Fed's policy rate Interest rates & bonds September 2026 3.8% ▼ -47 bps +5 bps
The Fed's first hike since 2023 and a bond rout push the 10-year Treasury yield to a 2002 high of 5.3%.
  • The Fed raised its policy rate to 3.8% on September 16; the next decision is October 28, with hike odds swinging after the weak jobs report.
  • Yield curve (10-year minus 2-year) at +0.5% is positive, but recessions have tended to arrive after the curve turns positive again, so it is not all-clear.
  • Credit stress (high-yield spread) at 3.0% is calm but rose 36 basis points in a month: lenders charge little for risk, pricing no trouble.
  • Tax-free muni yield (California) at 3.13% equals about 5.9% taxable for a top-bracket Californian, beating the 5.3% Treasury even with the 59% ratio historically rich.
3-month Treasury yield (cash rate) Interest rates & bonds 10/7/26 4.2% ▲ +21 bps +27 bps
10-year Treasury yield Interest rates & bonds 10/7/26 5.3% ▲ +115 bps +143 bps
30-year Treasury yield Interest rates & bonds 10/7/26 5.7% ▲ +95 bps +153 bps
Yield curve (10-year minus 2-year) Interest rates & bonds 10/8/26 0.5% ▼ -7 bps +42 bps
Credit stress (high-yield spread) Interest rates & bonds 10/7/26 3.1% ▲ +25 bps -4 bps
Broad bond fund (total US bond market) Interest rates & bonds 10/8/26 $70.22 ▼ -1.5% +4.1%
Tax-free muni yield (national) Interest rates & bonds 10/8/26 3.39% ▲ +27 bps +76 bps
2-year Treasury yield Interest rates & bonds 10/7/26 4.8% ▲ +119 bps +97 bps
5-year Treasury yield Interest rates & bonds 10/7/26 5.0% ▲ +131 bps +131 bps
5-year real yield (TIPS) Interest rates & bonds 10/7/26 2.7% ▲ +133 bps +138 bps
10-year real yield (TIPS) Interest rates & bonds 10/7/26 2.9% ▲ +114 bps +143 bps
Inflation the market expects (10-year) Interest rates & bonds 10/7/26 2.36% +1 bps +0 bps
Top-rated corporate bond yield (Aaa) Interest rates & bonds 10/7/26 6.3% ▲ +109 bps +141 bps
Lower-rated corporate bond yield (Baa) Interest rates & bonds 10/7/26 6.7% ▲ +93 bps +110 bps
Tax-free muni yield (California) Interest rates & bonds 10/8/26 3.12% ▲ +18 bps +73 bps
Munis vs Treasuries (yield ratio) Interest rates & bonds 10/8/26 59% ▼ -1,189 bps -459 bps
Tax-free muni yield (New York) Interest rates & bonds 10/8/26 3.33% ▲ +40 bps +84 bps
What leveraged loans pay Interest rates & bonds 10/8/26 6.40% ▼ -95 bps -20 bps
What AAA loan bundles pay Interest rates & bonds 10/8/26 4.85% ▼ -71 bps +34 bps
Inflation (PCE, yearly) Inflation August 2026 3.7% ▲ +99 bps -33 bps
Headline inflation at 3.7% is mostly an oil story; core runs milder, and the bond market still trusts the 2% target.
  • Inflation (PCE, yearly) at 3.7% versus core inflation at 3.2%: gasoline at $4.35, up 54.9% year-to-date, drives the gap.
  • Producer prices (yearly) at 5.2% run above consumer prices at 3.7%, pointing to more price pressure ahead, not relief.
  • Inflation the market expects (10-year) holds at 2.36%, flat on the month: the yield surge is real rates rising, not inflation fear.
  • Caveat September CPI lands mid-October and could swing the Fed's October 28 decision either way.
Core inflation (ex food & energy) Inflation August 2026 3.2% ▲ +39 bps -60 bps
Consumer prices (CPI, yearly) Inflation August 2026 3.7% ▲ +77 bps -80 bps
Core consumer prices (CPI ex food & energy) Inflation August 2026 2.8% ▼ -35 bps -144 bps
Rent inflation (yearly) Inflation August 2026 3.0% ▼ -44 bps -213 bps
Gasoline price (regular, per gallon) Inflation 10/5/26 $4.35 ▲ +39.4% +23.9%
Producer prices (yearly) Inflation August 2026 5.2% ▲ +253 bps +45 bps
Core producer prices Inflation August 2026 4.4% ▲ +146 bps -21 bps
Money supply (M2) Inflation August 2026 $23,343B ▲ +5.7% +8.4%
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%
Economic growth (real GDP) Economy Q2-2026 2.2% ▼ -180 bps -63 bps
Business surveys run hot while households feel squeezed: solid growth with confidence at slump levels.
  • Services activity (ISM PMI) at 55 and manufacturing at 54 both expand; a flash composite PMI of 58.4 was the strongest since July 2021.
  • Consumer confidence at 52 is a level seen only in deep slumps; the household saving rate at 4.1% is well below the 7% norm.
  • Economic growth (real GDP) at 2.2% for Q2 is normal but down 180 basis points from a year earlier.
  • Fed minutes show unanimity on higher rates in September but say data since the meeting has changed the picture considerably.
Consumer confidence Economy August 2026 52 ▼ -11.2% -17.8%
Retail sales Economy August 2026 $749,355M ▲ +4.7% +11.3%
Services activity (ISM PMI) Economy September 2026 55 ▲ +9.8% +1.3%
Manufacturing activity (ISM PMI) Economy September 2026 54 ▲ +11.0% +7.5%
Household saving rate Economy August 2026 4.1% ▼ -110 bps -135 bps
Financial conditions (Chicago Fed index) Economy 10/2/26 -0.49 ▼ -5.5% +24.9%
30-year mortgage rate Housing 10/8/26 7.4% ▲ +110 bps +117 bps
Mortgage rates at 7.3% and rising supply tilt power toward buyers, but financing costs more every month.
  • 30-year mortgage rate up 57 basis points in a month to 7.3%, following the 10-year Treasury yield to 24-year highs.
  • Homes for sale at 4.9 months of supply, up 28.9% year-to-date; above 6 months prices soften, below 4 they rise.
  • US home prices (20 cities) up 2.5% in a year, below 3.0% pay growth: affordability improving slowly from a stretched base.
  • Real estate funds (REITs) fell 5.4% in a month as yields spiked; REITs tend to lead house prices by about a year.
US home prices (20 cities) Housing July 2026 346 ▲ +2.5% +8.0%
Real estate funds (REITs) Housing 10/8/26 $89.35 ▲ +3.9% +8.6%
Homes started Housing August 2026 1,275 ▼ -1.2% -11.2%
Building permits Housing August 2026 1,403 ▲ +4.2% -8.5%
Homes for sale (months of supply) Housing August 2026 4.9 ▲ +6.5% +14.2%
San Francisco home prices Housing July 2026 363 ▲ +3.5% +2.4%
US dollar strength (index) Dollar & currencies 10/9/26 102.10 ▲ +3.1% -0.1%
The dollar's 3.3% monthly rise trims what foreign holdings return in dollar terms.
  • US dollar strength (index) at 102.39 broke above its 2026 highs as US yields rose past those of other economies.
  • Euro down 3.9% and yen down 3.0% on the month; developed-world stocks (ex-US) fell 3.3% in dollars partly on the currency.
  • Caveat the notes find no specific cause for euro and pound weakness this month; the yield gap is a mechanism, not a confirmed driver.
Euro (dollars per euro) Dollar & currencies 10/9/26 $1.12 ▼ -3.0% +2.0%
British pound (dollars per pound) Dollar & currencies 10/9/26 $1.32 -0.5% +3.1%
Japanese yen (dollars per yen) Dollar & currencies 10/9/26 $0.0063 ▼ -3.4% -9.6%
Gold price Commodities 10/9/26 $4,212 ▲ +5.3% +55.2%
Oil's 60% year-to-date rise is a Middle East supply shock; gold falls because safe yields now pay more.
  • Oil (WTI) at $92 pulled back 10.2% in a month from a mid-September peak, with Strait of Hormuz flows still constrained; the shock is not reversed.
  • The EIA expects Brent near $90 through 2026, easing toward $74 in 2027 as production recovers: relief priced for next year, not this one.
  • Gold at $4,146, down 5.9% in a month, as the stronger dollar and two-decade-high real yields raise the cost of holding a non-yielding asset.
  • Broad commodities fund up 45.4% year-to-date, dominated by energy: the inflation-hedge trade is already well advanced.
Oil price (WTI) Commodities 10/9/26 $90.5 ▲ +53.7% +14.7%
Broad commodities fund Commodities 10/8/26 $32.91 ▲ +50.9% +47.5%
Copper price Commodities 10/9/26 $6.67 ▲ +37.5% +47.0%
Bitcoin price Crypto 10/9/26 $82,549 ▼ -27.1% +40.3%
Bitcoin rebounds alongside tech stocks this quarter but sits 31.8% below a year ago: a risk asset, not a hedge.
  • Bitcoin at $83,038 rose 8.4% in a month and 31.4% in a quarter inside a down year; ethereum similar at -41.3% over a year.
  • Both rose as the Nasdaq-100 rallied; moving with tech stocks undercuts the case for crypto as portfolio insurance.
  • Caveat the research found no reliable reporting on what moved crypto this month; the figures stand without a cause.
Ethereum price Crypto 10/9/26 $2,499 ▼ -35.0% -0.4%
Federal debt (% of GDP) Government debt Q1-2026 123% ▲ +205 bps +297 bps
Bond markets now name government debt supply as a driver of rising yields, and refinancing pushes interest costs higher.
  • Federal debt at 123% of GDP with a -5.8% deficit; a weak 5-year auction in late September forced yields higher to clear.
  • Interest on the federal debt at 3.2% of GDP predates this yield surge; each refinancing at 5%-plus yields raises it with a lag.
  • Market commentary ties the selloff to heavy government and corporate debt supply, including a surge in data-center borrowing competing for investor dollars.
  • Credit-card delinquencies at 2.9% and a household debt burden of 11.1% show households calm; the strain is in public, not private, balance sheets.
Household debt burden Government debt Q2-2026 11.1% -1 bps +32 bps
Interest on the federal debt (% of GDP) Government debt 2025 3.2% ▲ +15 bps +109 bps
Federal deficit (% of GDP) Government debt 2025 -5.8% ▲ +43 bps +297 bps
Credit-card delinquencies Government debt Q2-2026 2.9% ▼ -19 bps +28 bps