Recent strength in U.S. economic data and expectations for additional Federal Reserve tightening have pushed the 2-year Treasury yield to 4.83% as of October 2, 2026, up from 4.78% the prior session and well above early-September levels near 4.39%. Markets price in a higher path for the federal funds rate than the FOMC median projection, reflecting resilient growth, energy-driven inflation pressures, and elevated term premiums amid heavy Treasury and corporate issuance tied to fiscal deficits and AI-related borrowing. The 2-year yield, which tracks near-term policy expectations, has risen roughly 128 basis points year-over-year. Key October catalysts include the September CPI release on October 14, PPI and retail sales on October 15, the October 27–28 FOMC meeting, and Q3 GDP plus PCE on October 29, any of which could shift short-rate pricing and set the month’s low.