AI Summary
5 min readSurging Bond Yields Pile Pressure on the Fed
The 10-year Treasury yield has climbed above 5% — its highest level in nearly two decades — as the Federal Reserve prepares to kick off two days of meetings that are widely expected to culminate in a rate hike. But the bond market's message to policymakers is not simply about inflation. It reflects a deeper loss of confidence in U.S. fiscal discipline, and it comes as the Supreme Court blocks a Trump administration push to overhaul mail ballot rules, the EPA moves to unwind climate regulations, and oil prices rise following an attack on a key Saudi pipeline.
Bond Market Sends a Warning on Fiscal Fundamentals
The global bond sell-off that dominated investor conversations last week has not abated. The 10-year yield holding above 5% is a milestone that signals more than just sticky inflation. She Lo, senior market strategist for BNP Paribas Asset Management, told the show that the market has priced in two rate hikes this year — September and December — driven by a combination of old and new worries. The old concerns include the U.S. debt situation and President Trump's intervention in Fed policymaking. The new ones include the Middle East war, fears about an AI bubble, and the sharp rise in Treasury yields themselves.
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of WSJ What’s News
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 (00:00) **Show Open & Supreme Court Blocks Mail Ballot Rules** - Episode begins with the Supreme Court blocking the Trump administration's new mail ballot rules, averting logistical chaos ahead of the midterms.
- 2 (02:56) **EPA Unwinds Climate Rules; Kennedy Center & McConnell News** - The EPA moves to reverse two key carbon emission rules, while the Kennedy Center faces a potential closure and Mitch McConnell returns to Congress.
- 3 (05:09) **Fed Meeting & Surging Bond Yields** - The Fed begins two days of meetings expected to culminate in a rate hike, while the 10-year Treasury yield holds above 5%, an almost 20-year high.
- 4 (07:06) **Fed Credibility vs. Economic Necessity** - She Lo explains the rate hike is a combination of protecting Fed credibility and addressing persistent inflation.
- 5 (07:51) **Global Sell-Off of US Treasuries** - A pattern emerges of foreign investors scaling back US Treasury holdings, signaling a loss of confidence.
- 6 (08:48) **Treasury Buyback Fails to Tame Yields** - The US Treasury's attempt to buy back long bonds did not lower yields as hoped, sending a clear market message.
- 7 (10:00) **$5,000 Check Proposal & Fiscal Deficit** - The proposal of a $5,000 check to every US adult citizen is seen as worsening the fiscal deficit.
+ Full timestamped outline available in the app
Show Notes
A.M. Edition for Sept. 15. The global bond selloff is gaining steam, with a jump in oil prices pushing the 10-year Treasury yield back above 5%. BNP Paribas’ Chi Lo explains how fears of runaway inflation and a range of other factors have dialed up the pressure on the Federal Reserve ahead of tomorrow’s interest-rate decision. Plus, the Supreme Court blocks President Trump's plan to restrict mail ballots. And, WSJ entertainment reporter Ben Fritz looks at Hollywood’s latest obsession with the tech bros of Silicon Valley. Luke Vargas hosts.
Correction: Nathan Fielder is the creator of the HBO television series The Rehearsal. An earlier version of this podcast incorrectly said he was the creator of The Audition. (Corrected on September 15)
Sign up for the WSJ’s free What’s News newsletter.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
More from this podcast
WSJ What’s News →