Another Upsurge in Long-Term Interest Rates Around the World
October 8, 2026
The two-, ten-, and 30-year U.S. Treasury yields rose overnight by 5, 3, and 2 basis points to 4.81%, 5.33% and 5.70%. Ten-year sovereign debt yields elsewhere have climbed four basis points in Germany, the U.K., and Canada, three bps in Switzerland and France, and two basis points in Spain.
Oil price news today has several troubling aspects that conspired to lift the West Texas Intermediate and Brent crude measures by slightly more than 4.5% overnight to $92.44 and $105.05 per barrel. Attacks on shipping vessels in the Gulf and Strait of Hormuz have intensified. President Trump is no longer interested in striking a ceasefire deal, and in fact there is a report that U.S. military leaders are exploring plans for resumed attacks on Iran before the U.S. midterm election.
Meanwhile, yesterday afternoon’s released FOMCÂ minutes from last month’s meeting reveal that all voting and non-voting members in the room favored the decision to hike the federal funds rate. Even with the increase, it was felt that policy had not reached an appropriately restrictive stance. A vast majority was inclined to hike rates again before the end of this year.
Fed Governor Waller today reaffirmed the need for more restraint, and Bank of England Monetary Policy Committee member Megan Greene pointed to sticky wage settlement awards as a risk against inflation falling to target as fast as hoped. She voted in the minority for a rate hike at multiple recent policy reviews.
Published minutes today from the last ECB Governing Council meeting observe upside inflation risks and pledge that the “Council was firmly committed to delivering 2% inflation over the medium term, was closely monitoring all incoming information, and remained agile and flexible to respond to changes in the inflation outlook in either direction.” Markets expect a rate hike soon.
The elevation of hydrocarbon costs today has rattled stock markets again around the world, with losses today of 3.5% in Singapore, 2.6% in South Korea, 1.9% in Indonesia, 1.4% in Japan, Hong Kong and India, and 0.8% in Australia and China (the latter final reopened after the week-long National Holiday. European stock exchanges and major U.S. future indices right before today opening bell on Wall Street were also in the red but by less than 1.0%.
The dollar is marginally higher, while the prices of Bitcoin and silver have fallen so far by 1.0% and about 2%.
The Central Reserve Bank of Peru‘s reference interest rate was kept unchanged at 4.25%, surprising pundits that were looking for a directional reversal. A trio of quarter percentage point cuts last year in February, May and September were the last changes and followed rate reductions of 175 basis points in 2024 and 100 basis points in the second half of 2023. A key point by officials in explaining the decision is already looking dated: “Global risks have moderated recently due to the relative normalization of supply conditions in hydrocarbon markets.” Peruvian consumer price inflation of 4.5% last month exceeds the 1-3% target range.
The National Bank of Serbia‘s policy interest rate has been at 5.75% since September 2024 and was kept there today after the latest scheduled review. CPI inflation of 2.2% is currently contained, but officials note “should the conflict in the Middle East persist or geopolitical tensions intensify further, the possibility cannot be ruled out that the effects could spill over to production and transport costs globally, supply chains and capital flows, and consequently to inflation.”
Officials at the National Bank of Romania likewise kept their 6.5% policy interest rate steady at the level such has been since a 25-basis point cut in August 2024. Romanian consumer price inflation of 6.2% as of August was its lowest in 14 months, but officials warn of upside risks that may arise from the Middle East conflict and the energy crisis.
Today’s menu of reported price data includes
- A 36-month high in Cypriot consumer price inflation of 3.7%, up from 0.1% in February just before the Middle East war began.
- A 4-month high in the index of Australian consumer price expectations to 5.3% from 4.9% in the two prior month.
- Irish CPI inflation of 4.1% last month, a 32-month high.
- A 0.6 percentage point increase in Lithuanian CPI inflation to 6.7% in September, highest in 38 months.
- Unchanged September readings of Latvian (3.2%) and Chilean (4.1%) consumer price inflation.
- Both consumer and producer price inflation in Mexico, the former rising to a 4-month high of 3.5% and the latter printing at 4.1%, each for the month of September.
- In Croatia, producer price inflation leaped to a 42-month high of 8.6% in August from 6.2% in July, 4.9% in June and -1.2% back in January.
Japan’s current account surplus of JPY 4.062 trillion in August was 16% wider than a year before and its widest in three months when adjusted for seasonal variation.
The German seasonally adjusted trade surplus in August (EUR 19.47 billion) was not quite as large as July’s 35-month high.
The September house price balance index compiled by Britain’s Royal Institute of Chartered Surveyors deteriorated to a more deeply sub-zero reading of -32% from -28% in August.
On this seventieth anniversary of Don Larson’s perfect game in the 1956 world series, the U.S. low hire/low fire employment trend and the Trump administration’s stepped-up deportation program conspired to hold the number of new jobless insurance claims below the 200 thousand threshold for a fourth consecutive week, which is something that hasn’t happened since late 1969 during the first year of the Nixon presidency.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Central Reserve Bank of Peru, FOMC and ECB board minutes, National Bank of Romania, National Bank of Serbia
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