Markets Weekly September 12, 2026

Summary

Joseph Wang reviews a week of bond market carnage, with the 10-year Treasury yield near 5% and the 30-year above 5.35%, driven mainly by an oil supply shock from Middle East disruptions. He argues that Secretary Bessent's expanded Treasury buybacks disappointed the market and failed to cap long-end yields. He also expects the Fed to hike next week and begin a hiking cycle, with the market pricing as many as four hikes over the next year, and warns that a no-hike outcome could cause a long-end bond implosion.

• 10-year Treasury yield surged to almost 5% and 30-year rose to about 5.35%.
• Oil prices are being squeezed higher by Middle East supply disruptions, SPR depletion, and Chinese demand.
• Bessent's expanded Treasury buybacks disappointed the market and only bought $5.1B versus $6B offered.
• The speaker says the buyback algorithm needs to overpay to cap yields.
• The Fed is expected to hike next week, with the market pricing up to four hikes in 12 months.
• Front-end and belly yields rose while the long end was less worried about inflation.
• If the Fed does not hike, the speaker warns of a long-end bond market implosion.