The week, explained: October 12 to 16, 2026

This was a quiet week for Federal Reserve policy. Interest rates on longer-term US government debt fell, while the Federal Reserve's main policy rate stayed where it has been. The Bureau of Labor Statistics also published September's inflation reading.

Longer-term Treasury yields fell over the week

The US government borrows money by selling Treasury securities: short-term bills, medium-term notes and long-term bonds. The yield is the annual return an investor earns by buying one at today's price and holding it until it matures. The Treasury publishes these yields every business day.

Comparing October 9, the last reading before the week began, with October 16: the 3-month Treasury bill moved from 4.25 percent to 4.26 percent, a rise of 0.01 percentage points. The 2-year Treasury note moved from 4.80 percent to 4.74 percent, down 0.06 percentage points. The 10-year Treasury note moved from 5.24 percent to 5.09 percent, down 0.15 percentage points. The 30-year Treasury bond moved from 5.60 percent to 5.43 percent, down 0.17 percentage points. The very short end barely moved, and the further out the maturity, the more the yield fell.

The Federal Reserve's policy rate did not change

The federal funds rate is the interest rate banks charge each other for borrowing cash overnight. The Federal Reserve does not set it directly; it announces a target range and uses its tools to keep the rate inside that range. On October 15, the effective federal funds rate, which is calculated from the rates actually paid on overnight loans in that market, was 3.88 percent. The target range was 3.75 to 4.00 percent, and it did not change this week.

The Federal Reserve made one monetary policy announcement during the week. On October 13 it released the minutes of the Board's discount rate meetings held on August 17, September 9 and September 16, 2026. In its press release, the Board said the minutes come from its meetings to review and determine the discount rates charged to banks borrowing through the discount window, the facility banks use to borrow directly from the Federal Reserve. The minutes are a record of past meetings rather than a new policy decision.

September inflation was reported at 3.7 percent

The Consumer Price Index, or CPI, tracks what a broad basket of goods and services costs for urban households. The Bureau of Labor Statistics released the September 2026 figure this week: prices were 3.7 percent higher than in September 2025, before seasonal adjustment.

That is an average across the past twelve months and a wide basket. Rent, groceries, gasoline and medical care all move at different speeds, so your own experience of price changes can look different from the national figure.

As background, the unemployment rate for September 2026 was 4.2 percent. That figure was published before this week.

What this means in everyday terms

Short-term Treasury yields and the federal funds rate tend to move together, and both tend to influence the rates banks pay on savings accounts and certificates of deposit (a CD is a deposit locked up for a fixed term at a fixed rate). With the policy rate unchanged and the 3-month bill flat, this week's readings pushed in neither direction on those products.

Longer-term yields work differently. The 10-year and 30-year yields are a reference point for fixed-rate mortgages and other long-term borrowing, so a fall in them can eventually show up in quoted rates. Banks and lenders set their own prices, and changes usually arrive with a lag, if at all.

Bond prices and yields move in opposite directions. When yields fall, bonds issued earlier at higher yields become more valuable to buyers. The reverse happens when yields rise, and that is the main risk of holding longer-term bonds: their prices swing more than short-term ones do.

A simple illustration of that direction: imagine a bond with a face value of 1,000 dollars paying 50 dollars a year, a 5 percent coupon. If buyers of similar new bonds can get only a lower yield, they will pay more than 1,000 dollars for the older bond to receive its higher payments.

Inflation of 3.7 percent over the year to September 2026 means money held in an account paying less than that lost purchasing power over the period, even though the dollar balance grew. Comparing an interest rate with the inflation rate is one standard way people think about savings.