The 2-year Treasury yield has climbed to 4.83% as of October 2, 2026—up sharply from around 3.5% a year earlier—driven primarily by the Federal Reserve’s September rate hike to a 3.75%-4.00% target range and expectations of one additional hike by year-end. The FOMC’s median dot-plot projection now shows the federal funds rate at 4.1% through 2027, reflecting resilient nominal GDP growth near 6.6% year-over-year, an energy-driven inflation uptick, and elevated term premiums amid federal debt surpassing $40 trillion and heavy corporate issuance tied to AI infrastructure. These dynamics have lifted real rate expectations and the real term premium, which together account for the bulk of the year-to-date rise. Key near-term catalysts include upcoming CPI and employment releases, Treasury auction results, and any further FOMC communications that could shift the market-implied path for short-term rates.