Brent crude prices declined to a range of $101–105 per barrel after reaching a peak of $107.63 on September 10, 2026. This retreat followed a period of market uncertainty driven by tensions related to the US-Iran conflict, which had previously pushed oil prices above $107 per barrel.
The drop in oil prices led to a decrease in 10-year US Treasury yields by up to 9 basis points, stabilizing in the 4.93–4.95% range. Previously, 30-year Treasury yields had reached multi-year highs near 5.37% during the peak of oil prices in early September.
Market participants had initially priced in higher probabilities of aggressive Federal Reserve rate hikes due to rising energy costs. With the subsequent decline in crude prices, expectations for rate increases softened, prompting a return of bond buyers to the market.
Federal Reserve Chair Kevin Warsh noted that current inflation scenarios require flexible policy responses. Data from June, August, and September 2026 indicates that energy market fluctuations have become a key indicator for fixed-income traders monitoring supply and geopolitical risks.
