Thu: GDP grew 3.4 percent, core PCE rose 0.3 percent on the month, and the 5-year fell 7 basis points. No plan, no grade.
Written Friday October 30 at about 5:50 AM ET, covering Thursday October 29; no plan was committed for Thursday, so nothing is graded. Advance Q3 GDP rose at a 3.4 percent annual rate (Q2 2.2); September PCE prices rose 0.5 percent on the month and 3.6 percent on the year, core 0.3 and 3.1 (BEA). The 7-year cleared at 4.894 percent with 2.46 cover (TreasuryDirect). The 5-year closed 7.0 basis points lower at 4.801 percent and the 10-year 5.6 lower at 4.989 (Yahoo).
Written Friday October 30, 2026, at about 5:50 AM ET, covering Thursday October 29. No plan was committed for Thursday, so nothing here is graded. Every number comes from Thursday's session or earlier; nothing from Friday is used. Committed before Friday's 8:30 AM ET data. The economy grew at a 3.4 percent annual rate in the third quarter, on BEA's advance estimate, up from 2.2 percent in the second. September's PCE price index rose 0.5 percent on the month, the core 0.3. Yields fell anyway: the 5-year by 7.0 basis points to 4.801 percent and the 10-year by 5.6 to 4.989, giving back all of Wednesday's post-Fed rise.
This continues Wednesday's note, where the Fed held on a 10-2 vote with two dissents for a hike and the long end sold off.
What the data said
- GDP, advance estimate, Q3 2026 (8:30 AM ET). "Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter"; Q2 was 2.2. Real final sales to private domestic purchasers rose 4.9 percent (Q2 4.6). The quarterly PCE price index rose at a 2.1 percent annual rate (Q2 5.0), the core at 2.5 (Q2 3.3) (source: BEA GDP release).
- Personal Income and Outlays, September (8:30 AM ET). PCE prices rose 0.5 percent on the month and 3.6 percent on the year; excluding food and energy, 0.3 percent and 3.1 percent. Personal income rose 0.2 percent, spending 0.5 percent, real spending less than 0.1 percent; the saving rate was 3.8 percent (source: BEA personal income release). The gap between the quarterly annualised rate (2.1) and the monthly and yearly rates is not a contradiction: they are different windows of the same index. How PCE relates to CPI is in PCE vs CPI.
- 7-year note auction (1:00 PM ET). $44 billion (CUSIP 91282CRV5, 4.875 percent coupon) at 4.894 percent, bid-to-cover 2.46, indirect bidders 57.8 percent of competitive awards. The six prior 7-year auctions this year, April to September, drew covers of 2.42 to 2.52 and indirect shares of 57.2 to 78.4 percent, so this one sat inside both ranges (source: TreasuryDirect 7-year auction records). See Treasury auction demand.
- Not checked: weekly jobless claims, ECB, and other international releases.
The tape
| Market | Wed Oct 28 | Thu Oct 29 | Change |
|---|---|---|---|
| 5Y yield (close) | 4.871% | 4.801% | -7.0 bp |
| 10Y yield (close) | 5.045% | 4.989% | -5.6 bp |
| 30Y yield (close) | 5.361% | 5.329% | -3.2 bp |
| DXY (4 PM ET) | 102.120 | 102.036 | -0.08% |
| Gold (GC=F, 4 PM ET) | 4,089.1 | 4,034.3 | -54.8 (-1.34%) |
| USD/JPY (4 PM ET) | 157.92 | 157.96 | +0.02% |
| EUR/USD (4 PM ET) | 1.1158 | 1.1166 | +0.07% |
| Brent, December (BZZ26, 4 PM ET) | 114.23 | 115.66 | +1.25% |
| Brent, January (BZF27, 4 PM ET) | 110.51 | 111.56 | +0.95% |
| S&P 500 (close) | 7,743.98 | 7,720.39 | -0.30% |
Sources: Yahoo Finance query1, same conventions as Wednesday's table. Treasury's closing curve: 2-year 4.61 percent (down 6 basis points), 5-year 4.78 (down 7), 10-year 4.98 (down 7), 30-year 5.32 (down 5) (Treasury nominal curve).
Strong growth, lower yields
The fall was mostly real yields. Treasury's 5-year TIPS yield fell 5 basis points to 2.31 percent and the 10-year 4 to 2.63 (Treasury real curve); FRED's breakevens eased, T5YIE to 2.47 from 2.49 and T10YIE to 2.35 from 2.38 (FRED, via our proxy). The 8:30 window was small: ^TNX opened the 8:20 AM bar at 5.026 percent and the 8:50 AM bar at 5.011, ^FVX 4.850 to 4.832 (Yahoo 30-minute bars). Most of the day's fall happened after that.
A 3.4 percent growth print with lower yields does not fit a simple "strong data, higher yields" story. The softer quarterly price figures and a 0.3 percent core month are one candidate; a give-back of Wednesday's long-end sell-off is another. We did not separate them, and without a plan there was nothing committed in advance to test either against.
After the close
Between Thursday's 4:00 PM prints and about 9:20 PM ET, DXY fell to 101.612, USD/JPY to 157.32, gold to 4,012.9 and S&P futures (ES=F) to 7,677.00 (Yahoo regularMarketPrice, recorded in the Friday plan). We did not check the cause. The Bank of Japan's October 29-30 meeting was due to report during Friday's Tokyo session; it is outside this note and is not graded in the Friday plan.
Friday's plan
A pre-registered plan for Friday October 30 (editorial/plans/2026-10-30.md) was committed Thursday at about 9:45 PM ET, after the close and before any Friday US release. It has one leg: the BLS Employment Cost Index for the third quarter, due at 8:30 AM ET Friday (BLS ECI), against Q2's 0.9 percent. At 0.6 percent or lower, the 5- and 10-year close Friday below Thursday's 4.801 and 4.989 percent; at 1.2 percent or higher, above them; in between, no call. It will be graded in the Friday note.
What we do not know
- What moved yields lower. Two candidates, neither tested.
- What moved the dollar and equity futures after the close. Not checked.
- Why gold fell $55 as yields and the dollar eased. No sourced explanation found.
What to read alongside
Nothing on this site is investment advice or a recommendation to trade. Most retail traders lose money. This note makes no forward call and grades nothing.