In these past few days, U.S. Treasury yields have climbed across the board—especially the 10-year yield, which has even moved back above 5%. Many people are asking: didn’t the Federal Reserve already raise rates? Why are interest rates continuing to rise instead?
Actually, the reason is quite simple: the U.S. interest-rate problem is no longer just about whether the Fed will raise rates.
On September 23, the yield on the 2-year Treasury rose to 4.903%, the 10-year to 5.116%, and the 30-year to 5.402%, with the 10-year reaching the highest level since 2007.
On one side, inflation is still fairly stubborn, and Fed officials remain concerned that inflation may not return to 2% in a timely manner.
On the other side, the U.S. economy hasn’t shown a clear recession. The September composite PMI even rose to nearly a 5-year high.
Add to that the rise in oil prices: energy prices could also push inflation higher again.
The bigger issue, however, is fiscal policy. The U.S. has a large budget deficit, and Treasuries must continue to be issued. The market needs to keep absorbing the additional Treasuries. The CBO projects that the U.S. deficit in fiscal year 2026 will be about $1.9 trillion.
So the logic now looks like this:
Inflation is high → the room for rate cuts is limited;
The economy is strong → the market isn’t rushing to bet on rate cuts;
Oil prices rise → inflation expectations heat up again;
The deficit is high → more Treasury supply;
Greater supply + higher risk → investors demand higher yields.
That’s why you can’t simply equate “future Fed rate cuts” with “the 10-year Treasury yield falling.”
For BTC, this logic is especially important. In the short term, if the 10-year Treasury yield keeps staying above 5%, valuation pressure on risk assets will be very hard to fully disappear. The macro mix that’s truly more friendly for BTC is still one where oil prices fall, inflation cools, and economic growth slows moderately—while Treasury yields begin a sustained downward trend.
So when you look at BTC recently, don’t just focus on the Fed’s next meeting. The 10-year Treasury yield is the more direct indicator of funding costs.
Actually, the reason is quite simple: the U.S. interest-rate problem is no longer just about whether the Fed will raise rates.
On September 23, the yield on the 2-year Treasury rose to 4.903%, the 10-year to 5.116%, and the 30-year to 5.402%, with the 10-year reaching the highest level since 2007.
On one side, inflation is still fairly stubborn, and Fed officials remain concerned that inflation may not return to 2% in a timely manner.
On the other side, the U.S. economy hasn’t shown a clear recession. The September composite PMI even rose to nearly a 5-year high.
Add to that the rise in oil prices: energy prices could also push inflation higher again.
The bigger issue, however, is fiscal policy. The U.S. has a large budget deficit, and Treasuries must continue to be issued. The market needs to keep absorbing the additional Treasuries. The CBO projects that the U.S. deficit in fiscal year 2026 will be about $1.9 trillion.
So the logic now looks like this:
Inflation is high → the room for rate cuts is limited;
The economy is strong → the market isn’t rushing to bet on rate cuts;
Oil prices rise → inflation expectations heat up again;
The deficit is high → more Treasury supply;
Greater supply + higher risk → investors demand higher yields.
That’s why you can’t simply equate “future Fed rate cuts” with “the 10-year Treasury yield falling.”
For BTC, this logic is especially important. In the short term, if the 10-year Treasury yield keeps staying above 5%, valuation pressure on risk assets will be very hard to fully disappear. The macro mix that’s truly more friendly for BTC is still one where oil prices fall, inflation cools, and economic growth slows moderately—while Treasury yields begin a sustained downward trend.
So when you look at BTC recently, don’t just focus on the Fed’s next meeting. The 10-year Treasury yield is the more direct indicator of funding costs.