Bond Trouble! - 09/23/26
TraderMerlin · Sep 23, 2026 · 1:03:16
TraderMerlin · Sep 23, 2026 · 1:03:16
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The bond market is flashing another warning—and stocks are starting to pay attention.
Treasury yields surged again today, with the 10-year yield climbing above 5.1% to its highest level since 2007, while shorter-term yields also pushed higher as traders increased their expectations for additional Federal Reserve rate hikes.
On today's TraderMerlin, we're digging into the bond selloff and asking a critical question:
How high can yields go before something in the broader market starts to break?
Just one week after the Federal Reserve raised rates for the first time in more than three years, the bond market appears to be saying the Fed may not be finished.
Inflation remains elevated. Economic activity has remained surprisingly resilient. Oil prices are back above $100. And today's strong business-activity data added another reason for traders to reconsider how aggressive the Fed may need to be.
That combination is pushing yields higher—and creating another major headwind for equities.
Why?
Because Treasury yields don't exist in a vacuum.
Higher yields mean higher mortgage rates, higher corporate borrowing costs, more expensive consumer credit and a higher discount rate on future corporate earnings. They also give investors a more attractive alternative to stocks.
That's particularly important for expensive growth and technology companies whose valuations depend heavily on earnings expected years into the future.
We'll break down:
