Fed hikes into 5% Treasury yields; Trump demands 1% — SkimNews
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- Federal Reserve raised rates 25bp to 3.75-4% on September 16, 2026 — its first hike since 2023 — with 16 of 18 FOMC members projecting another quarter-point move by year-end and Chair Kevin Warsh calling inflation 'too high.'link ›
- 10-year Treasury yield touched 5.041%, the highest since July 2007, while the 30-year hit 5.401% and 2-year reached 4.688%, with traders pricing a 92%+ chance of a Fed hike after August inflation ran 'well above' the 2% target.link ›
- President Trump demanded rates at '1%, or less' via Truth Social hours after the hike, having weeks earlier floated cutting off trade with countries running surpluses with the U.S. — a group that includes most of America's top trading partners.link ›
- Bank of Japan raised its policy rate 25bp to 1.25%, the highest level since 1995, yet the yen still weakened 0.45% to 156.64 against the dollar after the 7-2 decision.link ›
- AI-linked stocks slumped in Asian trade on Monday after Anthropic's Dario Amodei, OpenAI's Sam Altman, and Elon Musk publicly called for slower capability development; SoftBank fell as much as 13.2% and Nasdaq e-mini futures dropped 1.3%.link ›
- WTI crude topped $102 a barrel on Tuesday as the Iran conflict persisted and the Strait of Hormuz was 'essentially blocked,' pushing diesel above $6 a gallon and driving the BMO-measured one-month correlation between WTI and the 10-year yield to 0.96.link ›
Kevin Warsh's Fed hiked 25 basis points to 3.75-4% on September 16 — its first increase since 2023 — while the 10-year Treasury simultaneously traded above 5% for the first time since 2007. Sixteen of eighteen FOMC members penciled in another quarter-point to roughly 4.1% by year-end, with Warsh citing Iran-driven energy prices and telling reporters 'there's no hiding from hotspots around the world.' Trump responded on Truth Social demanding rates at '1%, or less,' yet notably did not personally attack his own appointee — a sharp departure from his years-long campaign against predecessor Jerome Powell.
The stories behind this week
Bank of Japan raises interest rates to 31-year high, flags concerns over inflationThe 25-basis-point hike to 1.25% pushes Japanese borrowing costs to a three-decade high and tightens the policy gap with the U.S., yet the yen still weakened 0.45% to 156.64 — suggesting markets see the move as insufficient to close the rate differential driving yen depreciation. The 7-2 split, with dissenters tied to Prime Minister Takaichi, signals internal BOJ friction with the government's easy-money stance just as Treasury Secretary Bessent publicly pressured Governor Ueda to act more decisively.
10-Year Treasury Yield Tops 5%The 10-year hasn't touched 5% since 2007, and the convergence of CNBC, CNN, Bloomberg, and the Washington Post on this single data point signals consensus that higher long-term rates are now a live issue for U.S. borrowing costs and debt sustainability.
10-year Treasury yield hits highest level since 2007 as traders bet a Fed rate hike is comingThe 10-year yield near 5% directly raises borrowing costs on mortgages, auto loans, and corporate debt, squeezing households and businesses alike. With WTI above $102 and diesel over $6 a gallon stoking inflation, the Fed is poised to tighten into an economy where energy-driven price pressures show no sign of breaking — leaving the central bank little room to pause, let alone cut.
Trump demands 1% or lower interest rate after first Fed hike since 2023The Fed hiked a quarter point to 3.75%-4% in a unanimous vote while the president publicly demanded a 75-point cut in the opposite direction, re-escalating a pressure campaign that had briefly quieted under Warsh. Trump is simultaneously floating trade retaliation against surplus countries—most major U.S. partners—as leverage, leaving Fed independence nominally intact but the confrontation fully reignited.
Federal Reserve hikes key rate to tackle ‘too high’ inflation, defying Trump demands for cutThe hike will raise borrowing costs on mortgages, auto loans, and credit cards for Americans already struggling with grocery, gas, and housing expenses as affordability dominates the midterm conversation seven weeks out. The Fed's signal of a second hike to 4.1% this year, despite Trump's public demands for cuts, puts the central bank on a collision course with a president who has already tried to fire a sitting governor.
U.S. Federal Reserve raises interest rates for first time since 2023, drawing Trump ireThis is the Fed's first hike since 2023, with Chair Kevin Warsh striking a hawkish tone and 16 of 18 policymakers signaling further increases — directly defying Trump's public demand for rates at 1%. The two-year Treasury yield jumping above 4.74% after the decision points to tighter borrowing conditions ahead, with Canadian mortgage rates facing upward pressure through the strong U.S.-Canadian five-year yield correlation.
AI-Linked Stocks Slump After CEOs Call for SlowdownInvestors who piled into AI-related equities had priced in relentless progress; a single Asian trading session wiped billions off SoftBank and chipmakers on CEO warnings that the technology itself is becoming dangerous. AI labs now face a credibility bind: justifying continued capex depends on the same trajectory their leaders publicly describe as an existential risk.
10-Year Treasury Yield Tops 5% Amid Fed WaitWith yields above 5% no longer triggering market sell-offs, the traditional relationship between bond stress and equity performance is shifting—meaning risk assets may stay resilient even as borrowing costs remain high, altering portfolio hedging strategies.
Why it matters: With the Fed signaling another hike into year-end while 10-year yields already sit above 5%, U.S. households face structurally higher mortgage, auto-loan, and credit-card borrowing costs for the foreseeable future.
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