US 10-Year Yield Rises to Highest Since 2007 as Fed Looms

Watch on YouTube ↗  |  September 15, 2026 at 17:20  |  10:25  |  Bloomberg Markets
Speakers
Dominic Konstam — Head of Macro Strategy at Mizuho Securities

Summary

Dominic Konstam, head of macro strategy at Mizuho Securities, discusses the Fed's tightening path under Kevin Warsh and the risk that a one-and-done signal sends 10-year Treasury yields to 5.25%-5.5%. He expects a proper tightening cycle to pressure risk assets and keep long-end Treasuries unstable, while global government bonds face high term premiums due to fiscal inaction. He also weighs consumer strain, oil-driven nominal GDP, and potential Fed dissent as market risks.

  • Fed policy debate centers on Warsh's view that underlying inflation is too high.
  • Konstam expects a proper tightening cycle, not one or two insurance hikes.
  • A one-and-done Fed signal could push 10-year Treasury yields to 5.25%-5.5%.
  • Long-end Treasuries face instability amid elevated inflation and insufficient buybacks.
  • Global government bonds are pressured by high term premiums and fiscal inaction.
  • Risk assets may stay on the back foot during the tightening and negative demand shock.
  • Consumer strain and oil-driven nominal GDP are cited as macro pressures.
  • A Waller dissent could create a mixed Fed message that markets would dislike.
Ideas
Dominic Konstam Head of Macro Strategy at Mizuho Securities 2:35
Long-end Treasuries pressured by insufficient buybacks.
The long end of the Treasury market will struggle to stabilize in an elevated inflation world unless the Fed is committed to raising rates. Treasury buybacks have been too small and have not bought through the market, so they are unlikely to cap long-end yields; this leaves long-dated Treasuries under pressure.
TLT MED
Dominic Konstam Head of Macro Strategy at Mizuho Securities 6:19
One-and-done Fed lifts 10-year yields.
If the Fed signals a one-and-done hike rather than a proper tightening cycle, 10-year Treasury notes would head toward 5.25%-5.5% yields and markets would take it badly.
US 10-year Treasury notes HIGH
Dominic Konstam Head of Macro Strategy at Mizuho Securities 8:06
High term premiums pressure global government bonds.
Investors dislike government debt after post-Covid debt deterioration and a lack of fiscal tightening, leaving term premiums high everywhere. Central banks face pressure to tighten policy and stabilize yields because governments will not tighten fiscally, so global government bonds remain under pressure.
Global government bonds MED
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This Bloomberg Markets video, published September 15, 2026, features Dominic Konstam discussing TLT, US 10-year Treasury notes, Global government bonds. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Dominic Konstam  · Tickers: TLT, US 10-year Treasury notes, Global government bonds