US Treasury Yields Rise, Putting Pressure on Rupee and Indian Markets
US Treasury yields have been rising sharply, reaching their highest level in nearly two decades. The benchmark US 10-year Treasury yield climbed to around 5.20 per cent on September 25, 2026, while the 30-year Treasury yield rose to 5.48 per cent, its highest since 2004.
This increase has caused a ripple effect in global markets, affecting the rupee and Indian bonds, equities, and portfolio returns. The US Federal Reserve raised its policy rate by 25 basis points (bps) in September to 3.75-4 per cent, citing concerns over inflation and resilient economic activity.
Alekh Yadav, head of investment products at Sanctum Wealth, explained that the rise in US yields reflects concerns over the US fiscal position and inflation. 'The US fiscal deficit remains around 6 per cent despite a resilient economy, debt-to-gross domestic product (GDP) continues to rise, and interest payments have surpassed defence spending,' he said.
The rupee has weakened by roughly 6.80 per cent in 2026 from around Rs 89.87 at the end of 2025, while Brent crude has surged nearly 21 per cent over the last month, adding to pressure on India's import bill and dollar demand.