Sunday, September 13

The dominant move was a renewed global bond selloff ahead of the September 16 FOMC decision, with market commentary tying the repricing to upside inflation pressure and a sharply higher perceived chance of a September hike. The U.S. 10-year yield approached 5%, while German 10-year yields moved above 3.45% and briefly reached levels last seen around 2011; Japan’s 10-year yield also breached 3% for the first time since 1996. Reuters framed the debt-market rout as increasingly consequential for lenders and corporate funding, while the Treasury’s expanded buyback operations appeared too small to offset the pressure. Despite the rates shock, U.S. equities gained roughly 0.9%, the VIX fell to 15.84, and the dollar was little changed. That resilience suggests equity positioning had not yet fully transmitted the bond market’s tightening impulse. Oil, however, fell about 2.4% to near $100 a barrel despite ongoing energy-supply concerns, while gold and bitcoin were broadly flat. The immediate test is whether the Fed validates the market’s hawkish repricing or relieves pressure on the long end.