It faded to 4.961% by mid-afternoon as Brent crude hit $108.50 ahead of the Fed decision Wednesday, Sept. 16.
The 10-year Treasury yield (the rate Washington pays to borrow for a decade) rose above 5% Monday, Sept. 14, hitting 5.014% then easing to 4.961% by mid-afternoon. It was only the second time above 5% in 19 years and the first since October 2023, up from a 4% low earlier this year, before the Iran war.
The inflation shock behind the move is the Iran war's oil spike — covered in the Houthis lead above. The average 30-year mortgage rate hit 7.17%, its highest in a year, up from 6.29% a year ago.
What next. The Federal Reserve announces its rate decision Wednesday, Sept. 16. White House economic adviser Kevin Hassett warned against hiking this close to an election, though the Fed raised rates four times before the 2022 midterms — the last one six days before Election Day. Economist Douglas Holtz-Eakin said skipping the increase would undercut the Fed's credibility while inflation stays the central challenge.
2022: the Fed hiked six days before Election Day
How we got here
- Sept. 14 — UK benchmark gas hit 208.73 pence per therm, its highest since December 2022.
- Sept. 9 — Treasury announced a buyback of up to $6 billion in long-dated bonds; long yields rose anyway.
- February — The CBO projected the 10-year rate would take at least 30 years to pass 4.4%; it hit 5% seven months later, economist Jessica Riedl noted.
The print driving it. August prices rose 0.4% on the month and 3.4% on the year, with gains beyond oil — against Trump's 'coming down sharply' claim, flagged by CNN fact-checker Daniel Dale.