The 10-year Treasury yield ended Tuesday near 5.00%, its highest close since July 2007. It reached 5.041% intraday.
Nineteen years separate this close from the last one at that level. The Fed decides rates at 2 p.m. ET today with the benchmark already there.
The yield move traces back to crude. West Texas Intermediate settled at $105.83, up 4.4% and its highest close since May 19.
Brent settled at $108.75, up 2.9%. Diesel futures settled at a record.
Saudi Arabia's East-West pipeline remains shut after last week's drone attacks, with no damage assessment released. Every day it stays closed keeps the inflation arithmetic in front of the Fed.
The long end took the worst of the selling. The 30-year touched 5.39%, its highest since June 2007.
Supply added pressure. A $13 billion 20-year sale drew weak demand, and longer-dated Treasuries extended their declines after the result.
That was the fifth straight session of rising 10-year yields. The dot plot at 2 p.m. is the next test of whether the curve has gone far enough.
Stocks fell for the sixth time in seven sessions. The S&P 500 lost 0.45% to 7,585.73 and the Nasdaq dropped 0.78% to 25,981.57.
Utilities absorbed the rate move most directly. The sector ETF fell 1% to $41, a 52-week low, with Exelon, NRG and CMS Energy also at new lows.
A regulated dividend competes badly against a risk-free 5%. Warsh's press conference at 2:30 p.m. is what that trade now hangs on.
Gold lost its usual bid. Spot fell 1.23% to $4,263.19, a six-week low.
The dollar index rose to 99.57, its highest since September 3. A firmer dollar and higher real yields are the standard weight on a metal that pays nothing.
Bitcoin slid below $75,900 from overnight highs above $79,500 after a Senate cloture vote on the Clarity Act failed. Crypto-linked equities closed down between 3.5% and 11%.
August retail sales arrive at 8:30 a.m. ET from the Census Bureau. July fell 0.6%, the first decline since October 2025.
A firm print gives the Fed cover to sound hawkish with the 10-year already at 5%.
EIA crude inventories follow at 10:30 a.m. ET. The decision and updated projections come at 2:00 p.m., with Chair Kevin Warsh at 2:30 p.m.
Futures price a quarter-point hike to 3.75% to 4.00% at roughly 94%. A hold would be the surprise, and the long end is where it would register first.
