Rates Week: 10-Year Yield Falls 13 Basis Points; Fed Meets Oct. 28

Treasury yields declined in the week of Oct. 19, according to FRED data. The 10-year yield fell 13 basis points, from 5.09% on Friday, Oct. 16, to 4.96% on Thursday, Oct. 22, the latest observation in the data used for this note. The 2-year yield was 4.65% as of Oct. 22, and the 10-year/2-year spread was 31 basis points as of Oct. 23.

The VIX stood at 19.03 and the high-yield option-adjusted spread at 3.40% as of Oct. 22. The effective federal funds rate was 3.88%. FRED's broad trade-weighted dollar index was last reported at 121.40 as of Oct. 16.

The Federal Reserve's interest rate decision is scheduled for Wednesday, Oct. 28, with the consensus estimate at 4.00%, matching the prior level. The FOMC's economic projections and a press conference are also scheduled that day.

Thursday, Oct. 29, brings third-quarter GDP growth, expected at 3.2% after 2.2% in the prior quarter, along with the GDP price index, forecast at 3.5% after 6.1%. September core PCE prices are expected to rise 0.3% on the month and 3.1% from a year earlier, compared with 0.2% and 3.0% previously. Headline PCE is forecast at 3.6% year over year. Personal income and spending are each expected to rise 0.3%. Weekly jobless claims are forecast at 196,000.

Earlier in the week, September durable goods orders, due Oct. 27, are expected to rise 0.6% after a 0.1% decline, and the CB consumer confidence index is forecast at 80.5 versus 81.9. On Oct. 30, the third-quarter Employment Cost Index is expected to rise 0.8% after 0.9%, and the Chicago PMI is forecast at 55.9 versus 58.8.

Data

Data: FMP, FRED. Figures are close-to-close unless stated.