The 10-year hits 2007 highs. The Fed decides today

Rundown · 2026-09-16

The FOMC decides at 2pm today, and the market it's deciding for just touched a level unseen since 2007. The 10-year Treasury yield closed Tuesday at 4.996% (an intraday high of 5.04%), its fifth straight rising session, after WTI settled $105.83, up $4.44 (+4.38%) on a fresh Saudi supply scare. Overnight, both of those moves are partly unwinding: WTI is $103.41, down about 2.3%, and gold — which settled at a six-week low Tuesday — is up roughly 1.3% to $4,388. A 25bp hike to 3.75%-4.00% is priced at ~92-93% on CME FedWatch, though Polymarket runs cooler at 88%. Futures are modestly higher (Dow, S&P and Nasdaq-100 all +0.2% to +0.4%), a quiet reprieve before the 2:00pm statement and dot plot, followed by Chair Warsh's press conference at 2:30pm.

Overnight

• A synchronized global bounce into decision day. Asia closed broadly higher: Nikkei 225 63,923.00, +438.90 (+0.69%) · Shanghai Composite 3,891.60, +27.32 (+0.71%) · Hang Seng 24,713.78, +46.54 (+0.19%) · ASX 200 8,696.5, +24.0 (+0.28%). Europe is higher into midday: STOXX 600 637.93 (+0.59%) · FTSE 100 10,724.99 (+0.63%) · CAC 40 8,135.42 (+0.56%) · DAX 25,486.05 (+0.33%)
• US futures are broadly, modestly higher — Dow, S&P and Nasdaq-100 futures each +0.2% to +0.4% — a relief bounce after Tuesday's close, which was the S&P's fifth decline in six sessions
• Oil is giving back part of Tuesday's spike, but the underlying supply picture is still unresolved and contested. Saudi Arabia suspended oil loadings at its Red Sea port of Yanbu — a fresh escalation — days after Houthi attacks forced the shutdown of its East-West pipeline (4-5 million barrels a day, roughly 4-5% of global supply). U.S. Energy Secretary Chris Wright said Tuesday the pipeline could resume flows "within days," directly at odds with the five-to-six-week repair estimate Reuters attributed to industry sources on Monday. Both claims are on the record; neither is confirmed
• The Treasury curve is the actual pre-Fed story. The 10-year closed Tuesday at 4.996%, touching 5.04% intraday — the highest since 2007 — for a fifth consecutive rising session. The 30-year hit 5.401%, also a 2007-era high. This is the backdrop the Fed inherits at 2pm, not a reaction to it

The Dollar & FX

• DXY is 99.66, up 0.04 (+0.04%) from Tuesday's close of 99.62, extending its climb as hike odds tick higher. The driver is unchanged: Fed repricing, not a fresh dollar catalyst
• USD/JPY is 155.09, essentially flat against Tuesday's 155.10 close, but that close itself pushed the pair through 155 for the first time in weeks — notable given the Bank of Japan's own hike lands Friday. The dollar's Fed-driven bid is currently overpowering the BOJ story entirely
• EUR/USD is trading near 1.1540, roughly flat versus Tuesday's close around 1.1539 (single-sourced, treat as approximate) — the euro has been pinned below the mid-1.15s all week as the Fed dominates positioning
• USD/CAD is 1.3928, up 0.06% from 1.3920 — quiet, though the mechanism (oil pulling back after Tuesday's spike) would normally lean the other way for a petro-currency; broad dollar strength is winning that tug of war
• AUD/USD has no fresh, independently confirmed level this morning — direction should track the broadly risk-on tape, but no number is verified enough to print
• BOJ Friday: a 25bp hike to 1.25% is widely expected — the third hike in under ten months and the fastest tightening pace since 1990. BOE Thursday: expected to hold at 3.75%

Energy & Metals

• WTI settled $105.83 Tuesday (+$4.44, +4.38%) — one of its largest single-session gains this cycle — and is $103.41-103.49 now (roughly -2.2% to -2.3%), in a $102.85-$105.63 range so far. Brent settled $108.75 Tuesday (+$3.07) and is trading near $107.70 this morning (approximate, single-sourced)
• Diesel closed at a fresh record Tuesday — NYMEX October diesel settled $5.2620/gallon
• Gold settled $4,332.80 Tuesday (-$19.10, -0.44%), a roughly six-week low, and is $4,388.30-4,388.50 now (+$55.50-55.70, +1.28% to +1.29%) — a sharp overnight reversal. This does not look like a haven bid (equities and futures are also higher, not falling); it reads more like pre-decision positioning or short-covering than a change in gold's rates-driven mechanism. Silver settled $63.86 Tuesday (-0.44%) and is $65.28-65.30 now (+2.2% to +2.3%)

Where We Left Off

• Tuesday's RTH close: Dow 52,093.11 (-328.09, -0.63%) · S&P 500 7,585.73 (-34.25, -0.45%) · Nasdaq 25,981.57 (-204.84, -0.78%) · Russell 2000 2,870.29 (-21.95, -0.76%) — the S&P's fifth decline in six sessions, in what is historically the worst month of the year for US equities
• Rate-sensitive sectors led the damage. Bank stocks fell broadly as the 10-year pushed toward 5% (JPMorgan, Goldman Sachs and Citigroup all softer); retailers and restaurants were also hit on consumer-spending concerns tied to higher rates and pump prices
• Crypto and crypto-adjacent equities fell hard after the Senate's Clarity Act failed a procedural cloture vote — a long-shot outcome given the lack of Democratic support, but still a headline. Bitcoin dropped toward the $75,000 area; Coinbase (COIN) fell roughly 10%
• One clear bright spot: Skyworks Solutions (SWKS) rose about 9.6% on two catalysts — Apple's newly unveiled foldable "Duo" iPhone, which reads through to Skyworks as a key RF-chip supplier, and confirmation that its $22 billion merger with Qorvo has entered final regulatory review with only two jurisdictions left to clear. Both SWKS and Qorvo are S&P 500 names
• What carries over: the market walks into today's decision already sitting on a fifth-in-six losing stretch and a 2007-era yield level. That is a lower bar for a "relief" reaction than existed a week ago — but also less room for the Fed to disappoint without real consequence

Yesterday's Data

• Empire State manufacturing fell to 7.6 against a 14.8 consensus (from 20.6 in August) as new orders and shipments both turned negative, even as prices paid hit a 38-month high — full brief
• ADP's weekly hiring measure jumped to 16,250 jobs/week, nearly double its July trough, landing hours before the Fed sat down — full brief

On The Calendar Today

Time ET · Event · Consensus · Prior · Hits

10:00 · NAHB Housing Market Index (Sept) · n/a · 35 · USD

14:00 · FOMC rate decision + Summary of Economic Projections · 25bp hike to 3.75%-4.00%, ~92-93% priced · held at 3.50%-3.75% · USD · GC · ES/NQ/YM

14:30 · Fed Chair Warsh press conference · n/a · n/a · USD · GC · ES/NQ/YM/RTY

The hike itself is not the fulcrum — it's close to fully priced, though not unanimously. CME FedWatch has it at 92-93%; Polymarket, a smaller and more volatile pool, has it at 88% — both call it the base case, neither calls it certain. What actually moves markets today is the dot plot and the vote count. The cleanest risk-friendly outcome would be a 25bp hike paired with an end-2026 dot near 3.9% and a stable-to-lower 10-year; the toughest would be the same hike paired with a 4.4% dot and yields pushing still higher. Some analysts have also flagged the possibility of a 10-2 vote, with two governors dissenting toward holding — a split decision reads differently than a unanimous one even at the same headline rate.

Index Movers

• Bank stocks (JPMorgan, Goldman Sachs, Citigroup) fell broadly Tuesday as the 10-year's push toward 5% pressured the sector; all three are Dow and/or S&P 500 weights, and their direction into the press conference is a clean read on whether the market treats today's decision as good or bad news for financials specifically
• SWKS rose roughly 9.6% Tuesday on Apple's foldable "Duo" iPhone unveiling (a direct RF-supplier read-through) plus its $22B Qorvo merger clearing into final regulatory review — an S&P 500 name moving on real, dated news, not FOMC positioning
• COIN fell roughly 10% Tuesday after the Senate's Clarity Act failed a procedural cloture vote; Bitcoin fell toward $75,000 alongside it. An S&P 500 constituent, but a political/regulatory story, not a rates one — worth separating from today's main event
• NVDA is stabilizing, not falling. It closed Tuesday at $212.17 (+0.57%) and is $213.18 premarket (+0.48%) — a second straight higher session after Monday's -3.36% AI-slowdown slide. Still the largest single dollar-weight name in both NQ and the S&P

What Would Change The Read

• Scoring Tuesday's Empire State watch: the call was that an undershoot of the 14.8 consensus would add a growth-scare angle. It undershot far more than flagged (7.6 actual) — but prices paid hitting a 38-month high kept the inflation side of the story alive too, so this cuts both ways rather than cleanly confirming a growth scare
• The Oman/Saudi pipeline situation didn't resolve — it added a second, competing claim. Wright's "within days" and Reuters' "five to six weeks" are both on the record now. Watch which one the market starts trading, not which one is eventually right
• Watch the dot plot median for end-2026, not just the vote. 3.9% with yields easing is the "hike now, mostly done" read; 4.4% with yields still climbing says the opposite, regardless of what today's vote count looks like
• Watch whether gold's overnight reversal survives 2:30pm. A pre-decision bounce that gives way once uncertainty clears is a different signal than one that holds through the press conference
• Watch bank stocks specifically into the decision. They were Tuesday's clearest rates-sensitive casualty; how they trade this afternoon is a faster read on the market's verdict than the index level alone

The Bottom Line

The setup Warsh inherits at 2pm is about as loaded as this cycle gets: a 10-year yield at levels last seen before the financial crisis, oil that spiked 4.4% in a single session on a supply scare nobody can yet confirm or resolve, and an equity market that just logged its fifth decline in six sessions. None of that determines today's vote — a hike is close to fully priced either way — but all of it raises the cost of a dot plot or a press-conference tone that reads as more hawkish than the market has already built in. Gold's overnight reversal and the broad, synchronized bounce in futures suggest a market leaning toward relief. Whether that holds past 2:30pm is the actual test; everything before it, including this morning's calm, is positioning.

_For informational purposes only. Not investment advice._