End of Day Summary – 10/21/2025 – Arbor Research & Trading, LLC

US Treasuries

Tuesday’s range for UST 10y: 3.945% – 3.99%, closing at 3.96%
Tuesday’s range for UST 30y: 4.53% – 4.57%, closing at 4.545%
Fed’s Waller: Welcomes ‘New Era’ for Federal Reserve in Payments

Join Us Thursday (10/23/25) for our Next Conference Call Featuring Jim Bianco

Jim Bianco Joins Fox Business to explain what Bond Yields are telling us about Federal Reserve Rate Cut Expectations

Intraday Commentary From Jim Bianco

This chart shows the track record of the 5-year TIPS in predicting actual inflation.

The orange line is the 5-year TIPS inflation break-even rate FIVE YEARS AGO. The blue line is the 5-year average inflation rate (because the 5-year TIPS is predicting the 5-year average inflation rate). The bottom panel is the difference, or the error rate, of the TIPS market.

TIPS break-evens are a terrible predictor of the actual inflation rate. Tossing a coin might be better.
That said, it is a good measure of what market players think will happen, but knowing market expectations says nothing about what will happen.

The Fed’s favor measure, the 5yr/5yr forward inflation rate, is even worse.

The Fed knows this, so they subtly started calling TIPS break-even rates “Inflation compensation” and not “inflation expectations.” Meaning the TIPS market is what the market is charging you to buy protection against inflation, but it is NOT a predictor of what the inflation rate will be.

In the News

Bloomberg: Catastrophe Bonds’ Huge Market Gains Put Reinsurers on Backfoot

ZeroHedge: Rare Earths Stocks Soar After Mega US-Australia Minerals Deal To Slash Dependence on China

SucessfulFarming: Brazil Begins Planting with Expected Record Acreage Driven by High Demand but Low Margins

Upcoming US Treasury Supply

Tentative Schedule of Treasury Buyback Operations

Upcoming Economic Releases & Fed Speak

US Economic Data Releases Delayed by Government Shutdown:

10/18/2025 – 10/30/2025: Fed’s External Communications Blackout
10/22/2025 at 07:00am EST: MBA Mortgage Applications
10/23/2025 at 08:30am EST: Chicago Fed Nat Activity Index Delayed by Government Shutdown
10/23/2025 at 08:30am EST: Initial Jobless Claims / Initial Claims 4-Wk Moving Avg / Continuing Claims
10/23/2025 at 10:00am EST: Existing Home Sales / Existing Home Sales MoM
10/23/2025 at 11:00am EST: Kansas City Fed Manf. Activity
10/24/2025 at 08:30am EST: CPI MoM / Core CPI MoM / CPI YoY / Core CPI YoY / Core CPI Index SA
10/24/2025 at 09:45am EST: S&P Global US Manufacturing PMI / Services PMI / Composite PMI
10/24/2025 at 10:00am EST: New Homes Sales / MoM
10/24/2025 at 10:00am EST: U. of Mich. Sentiment / Current Conditions / Expectations
10/24/2025 at 10:00am EST: U. of Mich. 1 Yr Inflation / 5-10 Yr Inflation
10/24/2025 at 11:00am EST: Kansas City Fed Services Activity
10/24/2025 at 11:00am EST: Bloomberg Oct. United States Economic Survey
10/24/2025: Building Permits / MoM
10/27/2025 at 08:30am EST: Durable Goods Orders / Durables Ex Transportation
10/27/2025 at 08:30am EST: Cap Good Orders Nondef ex Air / Cap Goods Ship Nondef Ex Air
10/27/2025 at 10:30am EST: Dallas Fed Manf. Activity
10/28/2025 at 09:00am EST: FHFA House Price Index MoM
10/28/2025 at 09:00am EST: S&P Cotality CS 20-City MoM SA; YoY NSA
10/28/2025 at 09:00am EST: S&P Cotality CS US HPI YoY NSA
10/28/2025 at 10:00am EST: Richmond Fed Manufact. Index / Business Conditions
10/28/2025 at 10:00am EST: Conf. Board Consumer Confidence / Present Situation / Expectations
10/28/2025 at 10:30am EST: Dallas Fed Services Activity