MoneySpider Weekly — 4 October 2026

Last week the bond market tightened without the Fed. This week the Fed stepped back, and the tightening carried on anyway. A weak jobs report (just 29,000 jobs added in September, with 60,000 taken off July and August) took market odds of an October rate rise from about 64% to about 16%. The 10-year Treasury yield still finished the week higher, at 5.28%, touching 5.29% on Wednesday; the 30-year reached 5.64%. The rise came from real yields, not inflation expectations, which held flat.

Then credit joined in. The extra yield investors demand on US junk bonds rose from 2.93% to 3.24% in the week, widening every trading day, to its widest since March; the lowest-rated tier passed 12%. On Thursday, Treasury asked to buy back $6 billion of 10- to 20-year bonds and was offered $46 billion. Shares barely moved: the S&P 500 fell 0.3%, the Nasdaq rose 0.5%.

The other side deserves equal weight. August spending, adjusted for inflation, rose 0.6%; second-quarter growth was revised up to 2.2%; and Micron reported revenue of $54 billion, nearly five times a year ago. That partly meets last week’s falsification test. Against it, the Conference Board’s confidence index fell to 81.9, its lowest since 2014, and wages (+3.0%) are still trailing prices (+3.4%).

This week’s signal: Tightening Into Fracture, broadening. Confidence is held at Medium, capped: the figures are confirmed from primary sources, but the reading that tightening is now reaching the weakest borrowers first is our own. Our falsification test: if junk spreads fall back below about 2.8% while the 10-year stays above 5%, credit is comfortable with higher rates, and we will say we were wrong. The first checks: the 10- and 30-year Treasury auctions on Wednesday and Thursday.