After the Fed's First Hike Since 2023, Credit Is Being Repriced From the Top Down
The policy rate moved a quarter point. Two-year and 10-year Treasury yields each rose about half a point in September. Here is how the move travels through the credit markets.
Why it matters
- Treasury yields rose about twice as much as the policy rate in September, so fixed-rate credit is repricing faster than the Fed itself moved.
- With the two-year yield near 4.9%, the risk-free return that private credit has to beat is the highest it has been in this cycle.
- Fed officials' projections pointed to one more increase before the end of 2026.
