U.S. Treasury yields edge lower as inflation worries keep rate pressure elevated

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Oleksii Zaichenko

29.09.2026

U.S. Treasury yields edge lower as inflation worries keep rate pressure elevated — Treasury yields dip amid inflation

Government borrowing costs ease slightly early Tuesday after climbing to fresh multiyear highs in the previous session. The move comes as investors continue to weigh persistent inflation risks, geopolitical tensions in the Middle East and a heavy week of U.S. economic data.

Highlights

The 10-year U.S. Treasury yield edged down 1 basis point to 5.2278%, while the 2-year note yield remained flat at 4.9243%.
Markets now price a more than 72% probability of a Federal Reserve rate hike at the October meeting after this month's 25 basis point increase.
Upcoming U.S. economic data releases—including August JOLTS, core PCE, quarterly GDP, and nonfarm payrolls—are expected to influence rate and growth outlooks.

Yield moves and drivers in focus

As reported by CNBC, the 10-year U.S. Treasury note yield is down about 1 basis point at 5.2278%, while the 30-year Treasury bond yield is also lower by 1 basis point at 5.466%. The 2-year Treasury note yield, which is closely tied to expectations for Federal Reserve policy, is flat at 4.9243%.

Yields and prices move in opposite directions, and one basis point equals 0.01%. In the previous session, the benchmark 10-year note yield and the longer-dated 3-year Treasury bond yield each jumped by 5 basis points, while the 2-year yield rose by 6 basis points.

The recent rise in borrowing costs comes as the U.S. and Iran hold separate talks with mediators aimed at resolving the ongoing conflict in the Middle East. A report by Al Jazeera says the seven-month war continues to support energy prices, reinforcing investor expectations that the Federal Reserve may need to keep tightening policy to contain inflation.

Fed expectations and data calendar

Markets are now pricing in a more than 72% chance of another Federal Reserve rate increase at the next meeting in October, according to the CME FedWatch tool. That follows a 12-0 vote earlier this month by the Federal Open Market Committee to raise its main interest rate by 25 basis points.

Investors are also preparing for a series of U.S. economic releases this week that may shape the outlook for rates and growth. The schedule includes August's JOLTS report, the core PCE index, quarterly GDP data, and the monthly nonfarm payrolls and unemployment rate.

In our earlier article on the rising correlation between oil prices and U.S. Treasury yields, we noted that crude and government borrowing costs have been moving in unusually close alignment, heightening the market’s sensitivity to energy swings. We also highlighted how this tighter link can complicate fixed-income positioning and influence inflation and growth signals that policymakers watch closely.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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