The 2-year Treasury yield, currently near 4.79% as of October 1, 2026, has climbed sharply from 3.55% a year earlier amid persistent inflation pressures, robust economic data, and elevated fiscal supply. Markets price in further near-term Fed tightening after the September 25-basis-point hike, with traders now assigning lower odds of an October move following comments from New York Fed President Williams and Vice Chair Jefferson emphasizing data dependence. Key near-term catalysts include the October 2 employment report, October 14 CPI release, and the October 27–28 FOMC meeting, which will shape expectations for the terminal rate and term premium. Rising Treasury issuance, AI-driven corporate borrowing, and a widening fiscal deficit exceeding 6% of GDP continue to lift real yields and the term premium, keeping the front end anchored to monetary policy expectations through 2027.