US Treasury prices fell sharply on September 9, 2026, as rising oil prices triggered inflation fears. The two-year yield rose to 4.42%, marking its highest level since July 2024, while the ten-year yield reached approximately 4.81%.
The price surge was driven by US airstrikes on Iranian oil tankers, which increased tensions in the Middle East and threatened global supply. Brent crude briefly exceeded $100 per barrel for the first time since July, and West Texas Intermediate approached $95 per barrel.
This follows a previous oil shock in March 2026, when crude prices spiked to $126 per barrel. That event increased inflation expectations and complicated the Federal Reserve's communication for several months.
Traders are now increasing the odds of a Federal Reserve rate hike ahead of the September FOMC meeting. Fed Chair Kevin Warsh has identified oil, tariffs, and AI infrastructure demand as key inflationary pressures.
The current yield curve is positively sloped by roughly 39 basis points, with the two-year yield at 4.42% and the ten-year at 4.81%. The market is pricing in tighter monetary policy due to these pressures.