Fed tightening and 5.25% Treasury yields raise financing risks

The Federal Reserve's September 16, 2026, 25-basis-point hike lifted the target range to 3.75%-4%, with 12 of 18 officials projecting at least one more hike this year. Core PCE remains elevated at 3.0% year over year, while the 10-year yield is about 5.25%; mortgage rates above 7% and uncertain labor and inflation data continue to pressure borrowers, businesses, and markets.