GS Coppola US Rates The Week That Was The Week That Will Be

GS Coppola - US Rates The Week That Was The Week That Will Be 18 Sep 2026 Jonathan Coppola · Goldman Sachs · Vice President · Global Banking & Markets FICC Fri 18 Sep 2026, 5:11pm ET

GS US FCI: Current Estimated FCI as of 18Sep26: 98.61; 18bp TIGHTER ON WEEK; 12bps TIGHTER YTD; 72bps EASIER FROM 01Jan25 GS US FCI & Contributions (1

Current Estimated FCI as of 18Sep26: 98.61; 18bp TIGHTER ON WEEK; 12bps TIGHTER YTD; 72bps EASIER FROM 01Jan25

GS US FCI & Contributions (18Sep25 – 17Sep26)

Markets headed into the weekend balancing resilient U.S. demand against renewed monetary tightening, with the Fed unanimously hiking 25bp to 3.75–4.00% and reinforcing its commitment to price stability. Stronger-than-expected retail sales and initial claims of 196k contrasted with softer housing and Friday’s flat industrial production print, including a 0.3% decline in manufacturing. Thursday’s relief rally proved fragile: Treasuries sold off again Friday, with 2y yields touching 4.744% and 10s returning to roughly 5%, as expectations for further Fed tightening kept pressure on the front end. Equities also edged lower, giving back some of Thursday’s rebound as higher yields and volatile oil continued to challenge risk sentiment.

The international backdrop highlighted the tension between inflation control and bond-market pressures. The BoE held at 3.75% with three votes for a hike, but its revised QT plans and pause in long-dated Gilt sales supported global duration Thursday. The BoJ followed with a 25bp hike to 1.25% Friday, yet the yen weakened as investors questioned the pace of subsequent tightening. Meanwhile, oil pared early Friday losses as Saudi supply disruptions and Middle East tensions remained unresolved. The week’s message was that softer pockets of activity and temporary relief in energy prices were insufficient to dislodge concerns over persistent inflation and higher borrowing costs.

Next week (September 21–25) will test the post-FOMC rates outlook against fresh growth signals and a busy Treasury calendar. U.S. flash PMIs Wednesday, claims and new-home sales Thursday, and durable goods plus final Michigan sentiment and inflation expectations Friday headline the data. Fed commentary includes Williams, Jefferson and Barkin Tuesday and Barr Wednesday. Treasury auctions bring 2s Tuesday, 5s Wednesday and 7s Thursday, while the next increased-size 20–30y Treasury buyback will be announced Wednesday the 23rd, with the operation Thursday the 24th—putting both auction demand and the buyback’s ability to support the long end firmly in focus.

Across G4, euro-area and UK flash PMIs Wednesday, followed by Japan’s PMIs and Germany’s Ifo Thursday, will sharpen the growth picture, while UK borrowing Tuesday keeps fiscal risks in view. Thursday’s Trump–Xi summit adds a potentially significant catalyst for risk sentiment through trade, technology restrictions and rare earths.

Upcoming week: Total G4 govt bonds duration issuance next week, net of CB purchases/sales, is estimated to be around $93mn/bp, higher than the $66mn/bp issuance this week, and around 1.1x the weekly average for 2025 (Ex1, Ex2). Cash issuance is estimated to be around $249bn (vs $79bn last week).

USTs: Duration issuance, net of buybacks, estimated to be around $66mn/bp (~1.6x weekly avg for 2025) with 2y/5y/7y auctions scheduled. Net cash issuance is estimated to be around $208bn.

EGBs: Duration issuance estimated to be around $21mn/bp (~0.8x weekly avg for 2025), with Germany & Italy scheduled to hold auctions and potential syndications from EGB issuers. Cash issuance is estimated to be around $29bn (€26bn).

UK Gilts: Duration issuance estimated to be around $3mn/bp (~0.5x weekly avg for 2025) with only a 5y auction scheduled for the week. Cash issuance is estimated to be around $7bn (£5bn).

JGBs: Duration issuance, net of BoJ purchases, is estimated to be around $3mn/bp (~0.3x weekly avg for 2025) with only a 5-11y liquidity enhancement actual scheduled. Net cash issuance is estimated to be around $4bn (¥0.65tn).

Energy and European-led pressure repeatedly challenged duration this week, with futures and cash flows driving the largest market moves, while swaps activity helped explain…