Fed Hikes Rates Amid Oil Volatility; Treasury Yields Climb, Gold Holds Ground
The Federal Reserve raised interest rates, while oil prices saw weekly declines from elevated levels, setting a cautious tone for upcoming global PMI and central bank decisions.
The story
The Federal Reserve implemented its first interest rate increase since 2023 this week, raising the target range by 25 basis points to 3.75% to 4.00%. Chair Kevin Warsh underscored the Fed's commitment to tackling persistent inflation, a decision made despite opposition from US President Donald Trump. This move contributed to US 10-year Treasury yields briefly surpassing 5%, a level not seen since 2007, before easing slightly later in the week.
Oil markets experienced significant volatility, with Brent Crude and WTI Crude seeing weekly declines but remaining elevated on a monthly basis. WTI crude had surged above $100 per barrel earlier in the week, driven by renewed geopolitical tensions in the Middle East. Attacks on Saudi energy infrastructure and concerns around the Strait of Hormuz led Saudi Arabia to reroute crude via ship-to-ship transfers to mitigate pipeline shutdowns.
Beyond the US, the European Central Bank raised its key interest rates by 25 basis points, with President Christine Lagarde stating that inflation is expected to remain above target for an extended period. The Bank of Japan also raised its policy rate by 25 basis points to 1.25%, a widely anticipated move, though the yen experienced a sell-off as the decision's forward guidance was perceived as less hawkish than some expected. Gold, meanwhile, traded higher as global yields and crude oil prices retreated later in the week.
Energy and metals
Brent Crude and WTI Crude experienced weekly declines, though both commodities maintained month-to-date gains. Henry Hub Natural Gas moved higher on the week. Gold extended its quiet grind higher over the past seven days, despite registering a month-to-date decline. In FX markets, the US dollar strengthened against the Saudi Riyal, Korean Won, and Japanese Yen, while the Euro and British Pound eased against the dollar. The US 10-year Note yield rose, alongside increases in the US 3-month T-Bill and 5-year Note yields, reflecting broader tightening in the Treasury curve, though the US 30-year Bond yield saw a slight decline.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 99.29 USD/bbl | -5.3% | -5.1% | +9.7% | +63.2% |
| WTI Crude | 96.08 USD/bbl | -5.7% | -4.0% | +12.0% | +67.3% |
| TTF Natural Gas | 79.52 EUR/MWh | +4.1% | -0.0% | +13.9% | +182.4% |
| Henry Hub Natural Gas | 2.91 USD/MMBtu | +0.4% | +2.9% | -0.8% | -21.0% |
| Gold | 4,424.90 USD/oz | +0.6% | +0.4% | -1.3% | +1.9% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.697 | -0.1% | -0.2% | -4.3% |
| USD / JPY | 156.855 | +0.5% | +2.2% | +0.3% |
| EUR / USD | 1.149 | +0.1% | -1.0% | -2.2% |
| USD / ARS | 1,514.000 | +0.3% | +0.1% | +4.3% |
| AUD / USD | 0.712 | +0.1% | -0.4% | +6.3% |
| USD / BRL | 5.142 | +0.4% | +0.8% | -6.1% |
| USD / CAD | 1.399 | -0.0% | +0.9% | +2.1% |
| GBP / USD | 1.339 | +0.3% | -1.0% | -0.6% |
| USD / IDR | 17,735.000 | -0.1% | +0.6% | +6.1% |
| USD / INR | 95.880 | +0.1% | +0.9% | +6.8% |
| USD / KRW | 1,385.000 | +0.4% | +3.0% | -3.7% |
| USD / MXN | 17.218 | +0.3% | +1.4% | -4.2% |
| USD / RUB | 84.125 | -0.4% | +0.2% | +5.8% |
| USD / SAR | 3.756 | +3.1% | +3.2% | +0.2% |
| USD / TRY | 48.760 | -0.0% | +0.3% | +13.5% |
| USD / ZAR | 16.261 | +0.0% | +0.5% | -2.0% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 3.978% | +6bp | +43bp |
| US 5Y Note | 4.856% | +6bp | +113bp |
| US 10Y Note | 4.998% | +2bp | +84bp |
| US 30Y Bond | 5.331% | -2bp | +49bp |
Central banks this week
Federal Reserve (Fed). Raised interest rates by 25 basis points to a target range of 3.75% to 4.00%.
This marked the first rate increase since 2023, with Chair Kevin Warsh emphasizing persistent inflation as the driver.
European Central Bank (ECB). Raised the three key ECB interest rates by 25 basis points.
The deposit rate increased to 2.50%, with President Christine Lagarde noting that inflation is projected to remain well above target for an extended period.
Bank of England (BoE). Held rates steady at 3.75% in a 6-3 vote but warned of potential rate increases.
The BoE indicated rates could rise if Middle East tensions escalate inflation. It also paused active gilt sales for six months and stopped sales of long-dated gilts entirely as part of its quantitative tightening program.
Bank of Japan (BoJ). Raised its policy rate by 25 basis points to 1.25%.
This widely expected hike was perceived as less hawkish than anticipated regarding future tightening, leading to a sharp sell-off in the Japanese yen.
Reserves — who holds what, who is moving
FX reserve movements indicated continued stability among major holders. China, Japan, and Switzerland maintained their positions as top foreign exchange reserve holders, signaling an ongoing reliance on the dollar system for global liquidity and trade. India and Saudi Arabia also held substantial foreign exchange reserves. These holdings underscore the persistent role of the US dollar in international finance, even as individual countries manage their reserve compositions in response to global economic conditions.
FX reserves — top 15 (excluding gold)
| Country | Reserves USD | As of |
|---|---|---|
| China | $3,424.9B | 2025 |
| Japan | $1,252.6B | 2025 |
| Switzerland | $929.6B | 2025 |
| Euro area | $594.4B | 2025 |
| India | $576.5B | 2025 |
| Saudi Arabia | $459.8B | 2025 |
| Korea, Rep. | $421.9B | 2025 |
| Singapore | $404.9B | 2025 |
| Brazil | $334.3B | 2025 |
| United Arab Emirates | $281.9B | 2025 |
| Thailand | $249.3B | 2025 |
| United States | $243.3B | 2025 |
| Mexico | $239.3B | 2025 |
| Israel | $229.5B | 2025 |
| Poland | $194.5B | 2025 |
Fuel + pump prices
| Fuel | Benchmark / pump | Driver + passthrough |
|---|---|---|
| Petrol (UK) | UK average: 170.54p per litre (September 15, 2026) | UK pump prices have climbed to four-year highs, with the latest surge in oil prices feeding through to motorists. |
| Diesel (UK) | UK average: 192.86p per litre (September 15, 2026) | Diesel prices are rapidly approaching £2 per litre, driven by wholesale market increases and supply constraints. |
| Petrol (India) | Delhi: ₹102.12 per litre, Mumbai: ₹111.21 per litre (September 20, 2026) | Retail fuel prices across major Indian cities remained largely stable, influenced by international crude oil prices and the rupee-dollar exchange rate. |
| Diesel (India) | Delhi: ₹95.20 per litre, Mumbai: ₹97.83 per litre (September 20, 2026) | Despite elevated international crude oil prices, domestic diesel rates have shown stability, with no major revisions in retail prices. |
| LPG (India) | New Delhi domestic (14.2 kg): ₹942.00; New Delhi commercial (19 kg): ₹2,747.50 (September 19-20, 2026) | Domestic LPG prices in New Delhi have remained unchanged, while commercial LPG cylinder prices saw a hike of around ₹9.50 from September 1. |
| Marine Bunker (Singapore) | VLSFO: ~$913.5 per metric ton, MGO: ~$1,448.0 per metric ton (September 18, 2026) | Bunker fuel prices in Singapore remain elevated due to ongoing supply fears and disruption around the Strait of Hormuz. |
| Marine Bunker (Rotterdam) | VLSFO: ~$716.5 per metric ton, LSMGO: ~$1,512.5 per metric ton, HSFO: ~$644.00 per metric ton (September 16-18, 2026) | Rotterdam bunker prices reflect the continuing impact of constrained traffic and supply-chain disruption in the Middle East. |
What we’ll be watching this week
- US Provisional Purchasing Managers' Surveys (Manufacturing and Services) on Wednesday, September 23, 2026
- China Benchmark Lending Rates Announcement (date unspecified, week of Sept 21)
- Bank Indonesia Rate-Setting Meeting (date unspecified, week of Sept 21)
- Switzerland, Sweden, Norway, Mexico, and South Africa Interest Rate Decisions (date unspecified, week of Sept 21)
- US Weekly Jobless Claims and August New Home Sales on Thursday, September 24, 2026
- German Ifo Business Climate Index for September on Thursday, September 24, 2026
- US August Preliminary Durable Goods Orders and University of Michigan Final September Consumer Sentiment Survey on Friday, September 25, 2026
- U.S.-China Summit (date unspecified, week of Sept 21)
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.