**Recent Fed tightening and sticky inflation have kept the 2-year Treasury yield elevated near 4.83-4.84% as of October 5, 2026, limiting potential downside moves through month-end.** The Federal Reserve raised the federal funds target range to 3.75-4.00% in September—its first hike since 2023—citing persistent price pressures, with the median dot plot signaling at least one additional increase by year-end. Headline CPI readings have reaccelerated, supported by energy prices, while core measures remain above the 2% target, sustaining market-implied odds of further policy restraint. Traders are monitoring the October 14 CPI release and upcoming FOMC minutes for signals on the neutral rate and the pace of any additional hikes, alongside labor market and growth data that could shift rate expectations. The 2-year yield’s sensitivity to near-term policy paths means any dovish surprises could pressure it lower, but the current hawkish backdrop and elevated Treasury supply keep the floor relatively firm absent clear disinflation progress.