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Four Tests in Five Days for a 10-Year Under 5%

By Steve Waller · November 2, 2026

Four Tests in Five Days for a 10-Year Under 5%

The 10-year Treasury ended October at 4.94% and Freddie Mac's 30-year average is 7.24%, but this week brings the Treasury's borrowing plan, the midterms, an expected Bank of England hike to 4.0% and a jobs report with a 55,000 consensus. On a $264,000 loan, a quarter point either way moves an exit buyer's budget across a $13,100 range.

Sunday's question, carried into the week

Sunday's recap asked whether a 10-year below 5% survives an election and a jobs week. The week opens with the answer still pending. The Treasury's daily curve had the 10-year at 4.94% on Friday, October 30, down from 5.28% on October 2 and a monthly high of 5.31% on October 5. The 2-year closed at 4.56% and the 30-year at 5.31%. Freddie Mac's 30-year average is 7.24%, its second straight weekly decline.

The jobs report on Friday is the headline, but it is the last of four tests this week, not the only one. Each of the other three can move the 10-year before payrolls are even printed.

Test one: how much the Treasury borrows

This afternoon the Treasury updates its borrowing estimate for October through December. Its preliminary guidance was $628 billion of privately held net marketable borrowing, assuming an end-of-December cash balance of $850 billion. Wednesday morning brings the quarterly refunding: how many notes and bonds it will sell, and whether it keeps its line that it "anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters."

This matters more than it sounds. Supply worries were one of the forces that pushed the 10-year to 5% in September. A higher borrowing number, or any hint of larger long-term auctions, adds supply to a market that only just found buyers below 5%. Unchanged guidance would be a quiet positive.

Test two: the election, read as a fiscal story

Tuesday's midterms put all 435 House seats, 35 Senate seats and 36 governorships on the ballot. Prediction markets price a change in House control as very likely and a change in the Senate as more likely than not. For a borrower the party outcome matters less than the deficit outlook that follows from it. Markets tend to react to what a result implies for spending, shutdown risk and the debt ceiling, not to the result itself. Expect overnight swings Tuesday and Wednesday, and do not read a one-day move as a trend.

Test three: another central bank tightening

On Thursday the Bank of England is widely expected to raise its rate by a quarter point to 4.0%, the start of a tightening cycle. It matters here because global bond yields move together. September's selloff was global, with German yields at 15-year highs, and a hawkish surprise from London could lift Treasury yields along with gilts. At home, money markets price about a 76% chance of a Fed hike on December 9 and fully price at least two increases over the next twelve months, per LSEG data.

Test four: Friday's jobs report

The consensus for October payrolls is 55,000, after 29,000 in September, with unemployment at 4.2% and average hourly earnings up 0.3% for the month and 2.9% from a year earlier. Monday's ISM manufacturing index, expected at 54.7, and Wednesday's ISM services and ADP figures come first. A strong payroll number with faster wage growth would make December's hike close to certain. A number near September's keeps October's relief intact.

What this does to a deal you are underwriting now

On a $264,000 loan, 20% down on a $330,000 house, principal and interest at Freddie Mac's 7.24% is about $1,799 a month. A quarter point either way is the realistic range for this week. At 6.99% the payment is $1,755; at 7.49% it is $1,844. Hold the payment at $1,799 and the exit buyer can carry about $270,700 at the lower rate or about $257,600 at the higher one. That is a $13,100 spread in buyer budget from one week of headlines.

Houston

HAR's October report is due in mid-November, and it will be the first local data to reflect October's rate relief. Until then, the setting is the one September left: more inventory than a year ago, slower contract activity, and homes taking longer to sell. That favors buyers who come with a price grounded in after-repair value and financing already lined up.

The week ahead

The question for Wednesday's brief is what the Treasury's auction plan and the overnight election results did to the 10-year, and whether it is still below 5% going into Friday.

The full report, and every earlier one, is available on ACP's website at acp-lending.com. Investors can sign up at acp-lending.com/investor-brief to receive new reports by email.

Sources

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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