{"id":438258,"date":"2026-09-17T14:16:37","date_gmt":"2026-09-17T07:16:37","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/long-end-treasury-yields-stay-calm-as-markets-digest-the-fed-438258\/"},"modified":"2026-09-17T14:16:37","modified_gmt":"2026-09-17T07:16:37","slug":"long-end-treasury-yields-stay-calm-as-markets-digest-the-fed","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/long-end-treasury-yields-stay-calm-as-markets-digest-the-fed-438258\/","title":{"rendered":"Long-end Treasury yields stay calm as markets digest the Fed"},"content":{"rendered":"
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There are plenty of ways to pick apart the market reaction to the Fed, but I think the one that matters most right now is happening in the bond market. More specifically, at the long-end of the curve.<\/p>\n

10-year Treasury yields are still hovering just below 5%\u00a0after the Fed raised interest rates by 25 bps and delivered what was, on balance, a fairly hawkish message. It briefly dipped as low as around 4.94% overnight before moving back toward 5%, while 30-year yields have also backed away slightly from recent highs.<\/p>\n

Considering where markets were heading into the meeting, that is not a bad outcome at all.<\/p>\n

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The fear coming into this week was that\u00a0the Fed would find a way to somehow make things worse.\u00a0Long-end yields had been pushing relentlessly higher on inflation concerns, higher oil prices, fiscal worries and questions over whether policymakers were doing enough to keep inflation expectations anchored.<\/p>\n

A hawkish Fed could have easily triggered another leg higher if markets interpreted the move as being too little, too late. But so far, that hasn’t happened yet.<\/p>\n

Instead, what we’re seeing is that most of the pressure has been concentrated further down the curve. 2-year Treasury yields jumped after the decision as traders moved to price in a greater chance of further rate hikes. Meanwhile, the long-end has been comparatively more well behaved. The curve is flattening rather than simply shifting violently higher.<\/p>\n

And that distinction matters. Traders and investors are repricing the Fed path, but they aren’t demanding a much bigger premium on long-term Treasuries – well at least not yet.<\/p>\n

And I think that’s the more important message for broader markets.<\/p>\n

Don’t get me wrong. 10-year yields sitting near 5% is still hardly something to be cheering.\u00a0Borrowing costs are still extremely restrictive, and the level itself is a major headwind for equities and financial conditions more broadly.<\/p>\n

However, there’s a big difference between yields holding around 5%\u00a0and the bond market losing confidence and sending them racing toward 5.25% or beyond.<\/p>\n

For now, the Fed appears to have bought itself some credibility at the long-end. And if they can continue that, it may prove to be far more important for risk assets than the 25 bps rate hike itself.<\/p>\n

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This article was written by Justin Low at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

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