Treasuries are pricing both policy and pressure
The Treasuries market has become the clearest scoreboard for two competing forces: the Federal Reserve’s policy path and the economy’s capacity to handle restrictive financial conditions. In early January 2026, that tension is visible in day-to-day yield moves and in how investors interpret “good news” (cooling inflation) versus “bad news” (slower growth).
A simple anchor is the 10-year yield. The widely referenced 10-year constant maturity series shows 4.15% on Jan 7, 2026 and 4.19% on Jan 8, 2026. Because many consumer borrowing costs tend to shadow this benchmark, the 10-year matters beyond trading desks. For instance, Freddie Mac data reported in early January shows the 30-year mortgage rate around 6.16%, with coverage noting that mortgage rates generally track the 10-year Treasury yield (reported near 4.17% at the time).
The Fed’s last move sets the front-end baseline
Evcry’s read starts with what the Fed actually did, not what markets hope it will do next. In its December 10, 2025 statement, the Federal Reserve cut the target range by 25 basis points to 3.50%–3.75%. The same statement also said the Fed would initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves—a reminder that market functioning and liquidity conditions are part of the policy toolkit.
From there, the debate shifts to timing. A Reuters report dated Jan 12, 2026 described how Goldman Sachs pushed back its rate-cut forecast, now looking for two cuts in June and September 2026. Separately, coverage of the Congressional Budget Office’s outlook notes expectations that rate cuts begin in 2026, even as longer-term yields may not fall meaningfully.
Supply is not neutral in a high-rate world
Even when inflation prints cool, Treasuries still need to clear a large amount of issuance. That is why Evcry treats Treasury financing guidance as a core input, not a sidebar.
The U.S. Treasury’s borrowing estimates can reset expectations for how much duration the market must absorb. For example, Treasury announced it expected to borrow $569 billion in privately held net marketable debt in the October–December 2025 quarter (with a stated cash-balance assumption). Treasury also centralizes quarterly refunding materials—useful for tracking the cadence of future issuance communication.
In addition, the quarterly refunding statement provides color on inflation-protected issuance decisions (TIPS), including auction sizing plans across the November 2025 to January 2026 window.
Evcry takeaway: when issuance expectations remain heavy, long-term yields can stay elevated even if the policy conversation becomes more “cut-friendly,” because investors may demand extra compensation to hold duration.
The curve is sending a different message than last year
One of the most watched gauges is the 10-year minus 2-year spread. By Jan 9, 2026, it was positive around 0.64% in commonly cited market-daily series. (The same spread is also tracked in the St. Louis Fed database.)
A positive spread doesn’t “prove” anything by itself, but it does mark a structural shift from the deep inversions that dominated many prior macro narratives. Evcry views this as a sign that investors are gradually repricing the balance between near-term policy rates and longer-term growth/inflation uncertainty.
For readers who want the mechanics behind the numbers, the U.S. Treasury explains how the daily curve is constructed and why fixed-maturity “par yields” are used even when no exact-maturity security exists.
What Evcry is watching next
Rather than locking into a single forecast, Evcry organizes the next phase into a checklist that can be updated as data arrives:
- Policy guidance vs. market pricing: how quickly expectations converge or diverge from the Fed’s caution after the December cut.
- Inflation persistence: whether the “last mile” disinflation remains bumpy (a key reason cuts may be delayed).
- Auction digestion and term premium: signs that investors require higher yields to hold longer maturities as issuance guidance evolves.
- Transmission into real economy rates: mortgage-rate behavior as a live test of how tight conditions feel for households.
Evcry conclusion
The Treasuries market is behaving less like a single-direction trade and more like a negotiation between policy expectations, issuance reality, and risk appetite. With the 10-year yield sitting around the low-4% range in early January and the curve no longer deeply inverted, Evcry sees 2026 as a year where the “why” behind yield moves will matter more than the headline yield itself.