---
title: Forecast journal — 1 October 2026 (one page)
author: ml
data_as_of: 2026-09-29
review_by: 2027-01-04, resolves 2027-10-01
---

# Forecast journal — 1 October 2026

## Calls

| | Mine (data) | Yours (gut) | Horizon |
|---|---|---|---|
| B: expensive money, no crisis | **55%** | 50% | 3 years |
| C: fiscal dominance / 1970s-lite | **30%** | 35% | 3 years |
| A: disinflation returns | **15%** | 15% | 3 years |
| 10-year on 1 Oct 2027 (now 5.26%) | **4.25–6.50%**, central 5.4 | 5–7% | 12 months |
| 30-year on 1 Oct 2027 (now 5.59%) | **4.90–6.75%**, central 5.85 | 6–9% | 12 months |

**Method.** Framework prior B 50 / A 25 / C 25, updated on the data room: A −10 (no growth trigger, Fed hiking), B +5 (vote model called B May–Aug), C +5 (fiscal strain, term premium). Ranges: every 12-month change since 1962 from a 4.5–6.5% level, applied to today and tilted up for C; each catches about 3 in 4.

## Three reasons

1. **Real rates and the Fed drive the sell-off (B).** TIPS +111bp in 12 months, breakevens flat at 2.36%, 5y5y 2.36%, Fed hiked to 4.00%, 2s30s flattened 113bp to 70bp.
2. **Fiscal and global strain keeps C at 30%.** Interest 21.1% of receipts (C band), deficit 5.4% of GDP at 4.1% unemployment, Kim-Wright term premium 0.50 to 1.02, JGB 10-year 1.66% to 3.06%, oil $96.
3. **A has no trigger; buyers are present.** Unemployment falling, HY spreads 3.1%, nominal GDP +6.3%, September 30-year auction 6.2bp through with indirect bidders at 79%.

**Your ranges.** 10-year 5–7% catches 52–61% of past outcomes; the 5% floor is too high (a fall of 26bp+ happened in 34–45% of years). 30-year 6–9% catches 13–30%; 9% needs +3.4pp, about the 1980 record. To express C, use 5.25–7.0%.

## Watch

**Would change my mind.** *Toward C:* 5y5y above 2.6% for two months; TIPS falling as the 10-year rises; 2s30s above 120bp with the Fed on hold; 30-year tails above 3bp twice. *Toward A:* unemployment 4.6%+, HY spreads above 4.5%, core PCE below 2.5%.

**Halve a probability if:**
1. 5y5y at 2.75%+ for two month-ends: halve B, mostly to C.
2. Unemployment 4.6%+ and HY spreads 4.5%+: halve B; A rises to about 35%.
3. 5y5y at 2.10% or lower, ACM term premium 0.40 or lower, and 30-year indirect bidders 70%+ for three auctions: halve C.

Full entry: `2026-10-01.md`. Scored in `forecasts.csv`.