On September 20, 2026, the Federal Reserve increased the benchmark federal funds rate by 25 basis points, setting a target range of 3.75% to 4%. This marks the first rate hike since July 2023. The decision follows persistent inflation that continues to exceed the Fed’s 2% target.
Treasury yields have reached levels not seen in nearly two decades. As of September 24, 2026, the 10-year Treasury yield reached approximately 5.12%, with a brief peak at 5.14%. The 30-year Treasury yield hovered around 5.41%.
Economic data, including robust manufacturing activity and a surge in new orders reported in September’s PMI, contributed to a spike in yields of 10 to 15 basis points. Strong labor market figures have further influenced market conditions.
Projections from the FOMC indicate that 16 out of 18 committee participants expect at least one additional rate hike before the end of 2026. Such a move would push the federal funds rate above 4%.
Rising yields are impacting borrowing costs for consumers and corporations. Mortgage rates for 30-year loans are likely reaching the 7% range or higher. Highly leveraged businesses, particularly in commercial real estate and technology, face increased financing pressure.
