The quick read: A fixed-rate commercial real estate quote starts from a Treasury yield, usually the 5- or 10-year, plus the lender's spread. That Treasury yield carries a term premium, the extra return investors demand for holding long bonds, and the premium tends to rise when private buyers must absorb more long-dated supply. Treasury auction sizes, Treasury buybacks and the Federal Reserve's holdings all change that supply, so your quote can move while the federal funds rate sits still. The September 15 to 16, 2026 FOMC minutes record nominal yields up about 35 basis points across the 2- to 10-year segment, with market commentary citing the Treasury buyback program and heavy AI-related private debt issuance as contributors to higher term premiums. On an illustrative $5 million loan, 25 basis points is about $10,000 a year of debt service.
This page covers the supply side of long rates. Why a hike in the policy rate can lift mortgage quotes by more than the hike itself is covered in why commercial mortgage rates rose more than the Fed hike, and how the index and spread combine into your coupon is in how a commercial loan interest rate is set.
Why do Treasury auctions move loan quotes?
Treasury auctions move loan quotes because every fixed commercial rate is priced as a spread over a Treasury yield, and the size of each auction sets how much long-dated debt private investors must buy. More supply at a given demand needs a higher yield to clear, and that yield flows straight into your index.
The newest schedule is the November 4, 2026 quarterly refunding statement. In it, Treasury set $125 billion of securities to refund about $97 billion of maturing notes and bonds, raising about $28 billion of new cash:
3-year note: $58 billion
10-year note: $42 billion, set for auction on November 10, 2026
30-year bond: $25 billion
Coupon guidance: Treasury "anticipates maintaining nominal coupon and FRN auction sizes for the next several quarters"
The prior statement, dated August 5, 2026, set the August 10-year at $42 billion and the September and October 10-year auctions at $39 billion each, and carried the same hold on coupon sizes. Steady sizes matter because a surprise increase is the supply shock the market prices fastest. The latest statement adds that Treasury "continues to evaluate potential future changes" to coupon sizes, so each refunding is a scheduled risk event for anyone near a lock.
How an auction clears also matters. Treasury's results for the October 7, 2026 reopening of the 10-year note show:
Amount accepted: $39.0 billion
High yield: 5.300%
Treasury's 10-year par yield that day: 5.28%
Bid-to-cover ratio: 2.77
Accepted from primary dealers: $984 million of $38.7 billion competitive
Dealers take what other bidders leave, so a small dealer allotment signals strong outside demand. A weak auction, where dealers absorb a large share at a yield above where the note traded beforehand, tends to push the whole curve higher that afternoon, and a lender pricing your loan that day sees it in the index.
How does the Fed's balance sheet move long rates?
The Fed's balance sheet moves long rates through the mix of what it holds, because every long bond or mortgage security the Fed owns is duration private investors do not have to carry. Since runoff ended, the Fed has shifted holdings toward bills while mortgage securities shrink, which returns long duration to private hands.
The FOMC ended the runoff of its securities holdings on December 1, 2025. Under the October 29, 2025 decision posted on the Fed's policy normalization page, the Desk rolls over at auction all principal payments from maturing Treasury securities and reinvests all principal payments from agency securities into Treasury bills. The October reopening results show that rollover in practice: $926 million of the note went to the Fed's System Open Market Account, on top of the $39.0 billion sold to the public.
The H.4.1 release for the week ended November 4, 2026 (averages of daily figures) shows where that leaves the portfolio:
Treasury bills: $573.1 billion, up $377.6 billion from a year earlier
Treasury notes and bonds: $3,620.8 billion, up $45.0 billion
Mortgage-backed securities: $1,883.5 billion, down $186.4 billion
Read the three lines together. Bills nearly tripled, notes and bonds barely moved, and mortgage-backed securities fell $186.4 billion. The Fed is absorbing short paper, not long paper. Each dollar of mortgage principal it swaps into bills is long, rate-sensitive exposure that private investors now hold. The September minutes add that the Desk had paused reserve management purchases and that their pace "was not on a preset course," so even the bill purchases are not a fixed tailwind.
What is the term premium?
The term premium is the extra yield investors demand to hold a long bond instead of rolling short bills for the same period, compensation for the risk that rates, inflation or supply move against them. It is the part of the 10-year yield that policy-rate expectations do not explain, and supply is one of its main drivers.
Break a 10-year yield into two pieces:
Expected path: what investors think short rates will average over the next ten years
Term premium: the extra return for locking money up for ten years instead
The Fed sets the first piece through policy and guidance. Supply sets much of the second. When Treasury sells more long notes, when the Fed holds fewer long assets, or when private borrowers flood the market with long-dated debt, investors need more compensation to take the duration, and the premium rises. The September minutes give a dated example: market commentary cited "uncertainty related to the U.S. Treasury's announcement and implementation of the buyback program" and "heavy private debt issuance to finance the development of artificial intelligence (AI) infrastructure" as contributing to higher term premiums and Treasury yields.
Buybacks are the counterintuitive piece. In the November 4 statement, Treasury plans up to $70 billion of off-the-run purchases for liquidity support, up from up to $38 billion in the August statement, plus up to $25 billion in the 1-month to 2-year bucket for cash management. Buybacks retire older issues to keep trading orderly; they do not shrink total borrowing, so the market weighs them against the new supply that funds them.
This page gives no numeric term-premium estimate, because we could not verify a current figure at a primary source. The mechanism is the point: the premium can rise with the federal funds rate unchanged, and your quote rises with it.
How do supply and the Fed feed into your quote?
Supply and the Fed feed into your quote through five readings that a lender's index absorbs before any spread is added: coupon auction sizes, Treasury buybacks, Fed bill holdings, Fed mortgage-securities holdings and the 10-year yield itself. Each has a primary source and a dated latest reading you can check yourself before locking.
Table: Supply-side drivers of fixed commercial loan rates (latest readings from Treasury's November 4, 2026 refunding statement, the Fed's H.4.1 for the week ended November 4, 2026, and Treasury's par yield curve for November 6, 2026)
| Driver | Source | Latest reading | Path to your quote |
|---|---|---|---|
| Driver Coupon auction sizes | Source Treasury quarterly refunding statement, Nov 4, 2026 | Latest reading 10-year at $42 billion; sizes held for the next several quarters | Path to your quote More long supply raises the term premium and the index |
| Driver Treasury buybacks | Source Same statement | Latest reading Up to $70 billion liquidity support, up to $25 billion cash management | Path to your quote Market commentary tied buyback uncertainty to higher term premiums |
| Driver Fed Treasury bills | Source H.4.1, week ended Nov 4, 2026 | Latest reading $573.1 billion, up $377.6 billion on the year | Path to your quote Absorbs short paper; little direct pull on the 10-year |
| Driver Fed mortgage-backed securities | Source H.4.1, week ended Nov 4, 2026 | Latest reading $1,883.5 billion, down $186.4 billion on the year | Path to your quote Returns long duration to private investors |
| Driver 10-year Treasury yield | Source Treasury daily par yield curve | Latest reading 4.86% on Nov 6, 2026 (4.95% on Nov 3) | Path to your quote The index most fixed CRE quotes start from |
The last row moves daily. Treasury's par yield curve put the 10-year at 4.91% on November 2, 4.95% on November 3, 4.90% on November 4, 4.84% on November 5 and 4.86% on November 6, 2026. Our commercial rates page tracks current loan rate ranges against that index.
How much does a quarter point cost on a $5 million loan?
A quarter point costs about $10,000 a year in debt service on a $5 million, 30-year amortizing loan, and if the lender sizes to a fixed payment, the same 25 basis points cuts the loan by about $126,000. A supply-driven move in the 10-year reaches your proceeds as well as your coupon.
This worked example is illustrative. The spread is an assumption, not a quote, and the 25 basis point move is a round number smaller than the roughly 35 basis point move the September minutes describe.
Loan amount: $5,000,000
Amortization: 30 years, monthly payments
Index: 4.86%, the 10-year par yield on November 6, 2026
Assumed spread: 1.83 percentage points
Rate before the move: 6.69%
Annual debt service at 6.69%: $386,769
Rate after a 25 basis point rise in the index: 6.94%
Annual debt service at 6.94%: $396,767
Added cost: $9,998 a year
Loan that $386,769 of debt service carries at 6.94%: about $4,874,000
Proceeds lost at equal debt service: about $126,000
The proceeds line is the one that breaks deals. Lenders size to a minimum debt service coverage ratio, so when the rate rises and net operating income does not, the maximum loan falls. A buyer with a fixed purchase price covers that gap in cash, and a refinance borrower may fall short of the payoff.
What to check before locking?
Before locking, check the Treasury calendar, the latest Fed balance sheet and the current 10-year yield, because each one can move your index between application and lock. Then decide whether to lock early or float through a scheduled event, which depends on your closing date and your coverage cushion.
Five checks, each with a primary source:
Refunding statement: Treasury sets coupon sizes and buyback plans once a quarter; read the newest statement before you sign a term sheet
Auction calendar: Treasury's November 4, 2026 refunding statement set the November 10, 2026 10-year note auction at $42 billion; TreasuryDirect posts each auction's results, and the next refunding statement is scheduled for February 3, 2027
Buyback schedule: each quarterly refunding statement sets the buyback amounts
Fed holdings: the H.4.1 release posts weekly
Index level: Treasury's daily par yield curve posts each business day
Ask each lender which index it quotes against, the 5-year or 10-year, and how many days its rate holds after you sign the term sheet. A lender that fixes the spread at application and the index at lock leaves you exposed to every auction in between; one that offers an early rate lock for a deposit moves that risk off you. Neither is right in every case. The deciding factor is your coverage cushion: if a 25 basis point move would push your debt service coverage below the lender's minimum, lock early.
How do you get lenders competing for your rate lock?
You get lenders competing for your rate lock by putting one complete file in front of several lenders the same day, because each quotes its own spread over its own index with its own lock terms, and on a day the 10-year moves those differences decide your coupon and your proceeds more than any single quote.
There are two ways to run that comparison, and the brokerage route comes first because it runs the comparison for you.
- Brokerage route. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Its software matches the deal against 20,000+ loan programs and returns 5–8 matches, so spreads, index choices and lock terms arrive side by side. Its brokers then negotiate the spread, the lock timing and the coverage sizing on your side, and carry the deal toward closing. It is a 5-minute submit, with a median first offer in under an hour, from an institutional lender. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
- Direct route. Call one lender and ask for a quote. You get that lender's spread and lock policy, and you repeat the request for every comparison, often on a different day's index.
Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Submit your loan for competing lender quotes
The bottom line
Fixed commercial loan rates start from Treasury yields, and those yields carry a term premium that rises when private investors must absorb more long-dated supply. Treasury's November 4, 2026 refunding statement holds coupon sizes for the next several quarters and plans up to $70 billion of liquidity-support buybacks. The Fed has added $377.6 billion of bills in a year while its mortgage holdings fell $186.4 billion. None of that requires a policy-rate change to reach your quote. Check the calendar, size your loan with a cushion, and get several lenders quoting the same file on the same day.