30-year yield at 5.45%, highest since 2004, with another Fed hike in view
Thursday, September 24, 2026: The 30-year Treasury yield is at 5.45% as of 11:30 a.m. Eastern, its highest since 2004; New York Fed President John Williams said another rate increase by year-end is “reasonable”; WTI crude is at $96.35, up 4.5%.
A jump in oil lifted the 30-year Treasury yield as much as four basis points this morning. West Texas Intermediate is at $96.35, up 4.5%, reversing this week’s slide with the Strait of Hormuz still closed. The 30-year is at 5.45% as of about 11:30 a.m. Eastern, the 10-year at 5.16%. Wednesday’s five-year notes already cleared above 5%, and $44 billion of seven-year notes are due at 1 p.m.
New York Fed President John Williams, who vice-chairs the rate-setting committee, told a London conference that another increase before year-end “seems to me a reasonable way of thinking about it.” Fed funds futures put the chance of an October increase at 77.5% on Thursday, up from around 53% on Wednesday. Sixteen of 18 policymakers have already signalled at least one more hike before the end of 2026.
Last week, under Chair Kevin Warsh, the Fed lifted its target to 3.75%–4.00%, the first increase since 2023. On Wednesday, Governor Michael Barr said “further policy adjustments are likely to be needed” to get inflation back to 2% in a timely way. Williams, speaking this morning, did not walk that back. The long-Treasury fund TLT is down 0.9%, a fourth session of losses if it holds through the close, after a three-session slide through Wednesday.
Treasury Secretary Scott Bessent said the U.S. and China had extended their trade truce to January 10 from November 10. President Xi Jinping is in Washington; he and President Donald Trump are due at the White House later Thursday.
Oil takes back the week’s drop
The U.S. oil fund USO had fallen 11% over five sessions through Tuesday, with West Texas near $90 and the Strait of Hormuz still closed. The fund is up 4.1% today; the energy sector fund XLE is up 1.5%.
USO rebounds after an 11% five-session drop
Brent, the global barrel, is at $107.90, up 4.7%. Talks between the U.S. and Iran have shown little sign of progress.
Five-year money at 5%
Wednesday’s $70 billion five-year note sale cleared at 5.033%, the highest since June 2006, with a 2.21 bid-to-cover against a six-month average of 2.33. The high yield sat 3.1 basis points above the 5.002% when-issued level. Indirect bidders took 54.31% of competitive awards. The 30-year fixed mortgage averaged 6.95% in Freddie Mac’s latest weekly survey, as of September 17, up from 6.76% a week earlier and 6.26% a year earlier.
The seven-year auction is still to come at 1 p.m. A well-bid sale that knocks long yields back would be the cleanest evidence against the morning’s setup. So would oil giving back the gain. Neither has shown up yet.
What the market has in front of it, as of late morning, is a 5.45% 30-year, a $96 barrel, and more Treasury supply before the close.
Frequently asked
Why did the 30-year yield jump today?
A 4.5% jump in oil, with WTI at $96.35 and the Strait of Hormuz still closed, lifted the 30-year as much as four basis points.
What did John Williams say?
The New York Fed president told a London conference that another rate increase before year-end "seems to me a reasonable way of thinking about it."
What are traders pricing for October?
Fed funds futures put the chance of an October increase at 77.5% on Thursday, up from around 53% on Wednesday.
Where did Wednesday's five-year note sale clear?
The $70 billion sale cleared at 5.033%, the highest since June 2006, with a 2.21 bid-to-cover against a six-month average of 2.33.