10-Year Treasury Yield Hits Highest Level Since 2007 as Hot PMI Data Boosts Fed Hike Odds

The benchmark 10-year Treasury yield surged to its highest level since 2007 on Wednesday, Sept. 23, 2026, after a stronger-than-expected reading on US business activity reinforced bets that the Federal Reserve will raise interest rates again in October. The move rippled across the yield curve and knocked stocks lower, with traders pricing in a sharply higher probability of another quarter-point hike within weeks.

Yields Surge Across the Curve

According to CNA, citing Reuters data, the 10-year yield jumped 13.89 basis points to 5.106%, marking its highest level since 2007 and its biggest one-day increase since April 2025. CNBC reported a slightly different level, putting the 10-year at 5.087%, up 12 basis points, a level not seen since July 2007. Yahoo Finance said the yield climbed as high as 5.07%.

The rate-sensitive 2-year yield also jumped, rising 11.4 basis points to 4.891% after touching 4.947% intraday, the highest level since May 2024, per CNA's Reuters citation. CNBC put the 2-year at 4.885%, up more than 10 basis points, and described it as the highest since June 2024. At the long end, CNBC reported the 30-year yield gaining more than 8 basis points to 5.389%, while Yahoo Finance noted the 30-year touched 5.37% as the stock market declined.

Using the Reuters-sourced levels reported by CNA, the gap between the 10-year and 2-year yields works out to roughly 21.5 basis points (our calculation: 5.106% minus 4.891% equals 0.215 percentage points). That spread is an arithmetic comparison of those two reported observations rather than a source claim, and any read-through is interpretation: it sits alongside Yahoo Finance's observation that long-dated yields have risen this year as investors demand more compensation for holding government debt, with corporate borrowing for the AI build-out adding to the supply of bonds competing for investor demand.

Hot PMI Data Fuels Inflation Worries

The selloff traced back to S&P Global's flash PMI survey. The Composite PMI Output Index, which tracks manufacturing and services activity, rose to 58.4 in September, the highest since July 2021, according to CNA's report of the S&P Global release. The services component jumped to 58.7 in September from 56.5 in August, its highest level in nearly five years, per CNBC.

The manufacturing figure also topped forecasts. Yahoo Finance reported the S&P Global Manufacturing PMI expanded to 57 in September, well above economists' forecast of 53.6, while CNBC cited a separate reading of 56.7, a level not seen in more than four years.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said US business "continues to boom" but flagged that "input costs have meanwhile jumped in September at the steepest rate for four years, with fuel and transport costs spiking higher thanks to the rise in oil prices," according to CNBC. Traders responded by lifting the odds of another quarter-point hike at the Fed's October meeting: CNBC cited CME Group FedWatch pricing of 73%, up from 55% on Tuesday — an 18-percentage-point increase, or about 33% higher (our calculation: 73 - 55, and (73 - 55) / 55 * 100) — and less than 10% a month ago, while Yahoo Finance put the odds at 70% and Reuters, via CNA, cited fed funds futures pricing of 66%, up from 53% earlier in the day. Bottom line: hotter-than-expected September activity readings pushed the 10-year yield to levels last seen in 2007 and, on the market pricing cited by CNBC, Yahoo Finance and Reuters, made an October hike the majority expectation, though the eventual policy path remains uncertain.