The 2-year Treasury yield, recently trading near 4.78-4.83% as of early October 2026, has risen sharply from February lows around 3.4% following the Federal Reserve’s September 16 rate hike of 25 basis points to a 3.75-4.00% federal funds target—the first increase in three years amid elevated inflation. August CPI showed a 3.4% year-over-year rise with core at 2.4%, while the September jobs report delivered just 29,000 payroll gains and a 4.2% unemployment rate, prompting markets to sharply reduce odds of an October FOMC hike. Traders will monitor the October 14 CPI release, October 27-28 FOMC meeting, and subsequent labor data for signals on whether policy tightening pauses or extends, shaping expectations for any further yield compression before year-end.