Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee

February 3, 2026 Letter to the Secretary Dear Mr. Secretary, Since the TBAC last met in early November, Treasury yields are little changed. While domestic fixed-income markets were relatively stable, a sharp rise in Japan government bond yields in January rippled through global fixed-income markets. Equity prices continued to advance over the last three months, and the S&P 500 is now up 16% over the last year. Credit spreads remain tight. The VIX measure of implied volatility, at 16, is close to multi-year lows. Three-month expiry options on ten-year interest rate swaps imply just 66 basis points (bp) of annualized volatility, also a historically low reading. Currency and commodity prices have exhibited higher volatility. The US dollar depreciated sharply against major currencies in late January, but that move partially reversed in recent days.