Story perspectives

Treasury Yields Hit 5% as Fed Rate-Hike Odds Surge

By Drooid · Sep 15, 2026, 2:54 PM UTC · How we work

Summary

Treasury Yields Surge

U.S. Treasury yields breached 5% intraday, hitting 5.026% on September 15, the highest since July 2007.
CME FedWatch indicates a 92–93% probability the Federal Reserve will raise rates by 0.25 percentage point to 3.75%–4.00%.
August CPI rose 3.4% year-over-year and core CPI rose 0.3% month-over-month, far above the 2% target.
Oil prices jumped over 4% after attacks on a Saudi pipeline, heightening inflation worries.

Summary

Bessent Announces Buyback

Maya MacGuineas warns 80 bps-plus rate gaps could force $2.7 trillion interest spending by decade’s end, outpacing Medicare.
President Donald Trump pledged $5,000 per American if Republicans keep Congress, potentially adding $1 trillion to the deficit.
Treasury Secretary Scott Bessent announced a $6 billion Treasury buyback, three times normal, to ease market pressure.
Fitch Ratings warned in August that U.S. debt over $40 trillion leaves the nation vulnerable to future shocks.

History

Historical Context

In 1979-1981, newly appointed Fed chair Paul Volcker lifted the federal funds rate from about 11% to a 20% peak to crush inflation that had surged to 13.5% in 1980. The policy spurred a brief 1980 recession, pushed unemployment to 7.5% and forced the Treasury to sell $150 billion of debt. Today’s 5% Treasury-yield jump and high-rate outlook echo that Volcker era’s inflation-fighting pressures.

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Treasury Yields Surge

U.S. Treasury yields breached 5% intraday, hitting 5.026% on September 15, the highest since July 2007.
CME FedWatch indicates a 92–93% probability the Federal Reserve will raise rates by 0.25 percentage point to 3.75%–4.00%.
August CPI rose 3.4% year-over-year and core CPI rose 0.3% month-over-month, far above the 2% target.
Oil prices jumped over 4% after attacks on a Saudi pipeline, heightening inflation worries.

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