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Posted on 09/15/2026 7:44:26 AM PDT by Miami Rebel
The benchmark 10-year Treasury yield climbed to its highest levels in 19 years on Tuesday as oil prices surge from the Iran conflict and expectations grow that the Federal Reserve will raise interest rates on Wednesday. The rate milestone could ripple through the economy as the 10-year yield is a benchmark for consumers loans and corporate funding.
The 10-year yield was last up more than 3 basis points to around 5%. Earlier in the session, it scaled to 5.041%, the highest since July 2007. One basis point equals 0.01 percentage point, and yields and prices move in opposite directions.
The yield on the longer-dated 30-year Treasury bond, more sensitive to geopolitical risks, rose 4 basis points to 5.368%. The yield had hit a high of 5.401% — also its highest level since June 2007.
The 2-year Treasury note yield climbed more than 1 basis point to 4.648%. It had earlier reached its highest level since July 2024 at 4.688%.
The move comes at the start of the Fed’s two-day policy meeting, with markets pricing in higher chances of a quarter-point rate hike when the meeting concludes Wednesday after August inflation remained well above the central bank’s 2% target. Traders are pricing in a more than 92% chance that the Fed will raise rates by 25 basis points in its latest meeting, according to the CME FedWatch tool.
“U.S. 10-year treasuries are highly sensitive to inflation expectations, and with inflation gauges still above the Fed’s target of 2%, we believe this tight correlation will likely persist for a while,” said Jonathan Liang, Standard Chartered’s CIO of fixed income and FX.
The tight relationship between oil and Treasurys could add further upward pressure on yields if crude prices remain elevated, as higher energy costs feed into inflation expectations, experts told CNBC.
The one-month rolling correlation between front-month West Texas Intermediate crude and the 10-year Treasury yield has climbed to 0.96, according to BMO Capital Markets.
WTI crude oil was higher again on Tuesday, topping $102 a barrel as the Iran conflict drags on and the Strait of Hormuz remains essentially blocked. After surging during the onset of the war earlier in the year, crude oil traded below $70 a barrel in July on expectations an MOU signed by U.S. and Iran would lead to a de-escalation in the conflict.
Prices have since rebounded as Iran and U.S. restarted attacks and oil inventories declined. Diesel gasoline, used by trucks and other key transport for the economy, recently topped $6 a gallon, further flaring inflation concerns.
“Speaking simplistically, higher oil prices lead to higher inflation expectations and vice versa,” said Steve Sosnick, chief strategist at Interactive Brokers.
“Normally, the relationship isn’t as clean as it is now, but the geopolitical drivers behind the price of oil and global inflation are so prominent that the normally modest correlation has become much tighter,” he told CNBC. “As long as oil prices remain firm and continue to drift higher, this will add pressure to interest rates.”
To be sure, National Economic Council Director Kevin Hassett told CNBC on Tuesday that he believes inflation is showing signs of cooling.
“If you look at the sort of near-term memory and the stochastic process that drives inflation, then you can see that things are slowing down,” he said during a “Squawk Box” interview. “That would be the argument that one would make if you were going to dissent tomorrow. But again, we respect the decision that the Fed makes.”
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(If the Fed DOESN'T raise rates, I expect the ten-year to breach 5.25%.)
As a sidenote, Bessent's twist has been an utter failure.
This dude should have just listened to himself:
I really miss that guy...
You are not alone.
2007 was yesterday
The Global Government Debt Enslavement Cult Exempt Ones, strike again.✖️ All 40+ Trillion Big Global Dumpings Un-Beautiful of it. ✖️
Swarms of dirty slimes in our country, on all our prices. ✖️
If short-term rates are increased, long-term rates are likely to come down, since bond traders will think that the Fed takes inflation seriously.
He’s a ******,***** ,*******, Romans Chapter 1.📖
📜
No clue what you mean.
Should the Fed hike?
Agreed, I think at least two interest rates hikes are necessary. Tomorrow is a given, and another one in December is a virtual lock now.
I had a fair amount sitting peacefully in my money market fi=und, and I have started moving that to 6 month treasuries, which are paying an extra 1/2 percent.
and the continuation comment was this
https://x.com/realDonaldTrump/status/1181905661300559872
....IN THE HISTORY OF OUR COUNTRY! We went to war under a false & now disproven premise, WEAPONS OF MASS DESTRUCTION. There were NONE! Now we are slowly & carefully bringing our great soldiers & military home. Our focus is on the BIG PICTURE! THE USA IS GREATER THAN EVER BEFORE!
Following the 10 year as it does — 30 year mortgage average rises to 7.17%.
I’ve never been a doomer, but the hangover coming from our debtaholic behavior is going to be painful one.
When interest rates are raised tomorrow, It will be interesting tomorrow to see if Trump ‘bad-mouths’ Warsh for just doing his job.
If there is a rate hike by Trump’s guy the republicans are F’D! They at this point the republicans are F’D because of current gas prices etc any damn way because there is no way chits going back to normal by the elections.
He stopped the 1 nation who knows how to deal with musscums, ISREAL.
He relied on a nation of absolute cowards to help defeat the iranians and bring in the rest of the antiiran musscums (SA).
Everything’s so great, can’t get better.
>>If there is a rate hike by Trump’s guy the republicans are F’D!
They are already - all self-inflicted - have you seen the price of oil lately? just when folks will be filling their tanks for the start of the heating season....they won’t forget it at the polls. Right or wrong - the guy in office is going to take the blame (and in this case rightly so)
Agree. That’s what happens when you have the closest thing we have seen (since Reagan) to an anti-expediency approach to decision making. Perhaps more so than Reagan. I see them very similar on foreign affairs and trade. Perhaps not so much on economic issues outside of taxes. Trump is much more willing to take the ‘laissez-faire’ approach to business, which I agree. A much greater risk politically. He tried his shot on reducing spending; cutting government employees was the only bullet our other elected leaders would allow him to take aim and shoot.
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