Fed Hikes Rates to 4%, 10-Year Yield Surges Above 5%

The Federal Reserve raised its overnight interest rate to 3.75-4.00%, marking its first increase since 2023 and first move since a cut in December 2025.

The 10-year Treasury yield rose above 5% for the first time since 2007, reaching as high as 5.00% before falling back to near 4.96%. This is significant because it affects borrowing costs throughout the economy and has implications for the US dollar.

The Federal Open Market Committee (FOMC) voted unanimously (12-0) on this rate hike, with no changes made to the balance sheet or bank reserves.