Weekly Commentary September 21st, 2026

Weekly Market Commentary

September 21st, 2026 

The Markets  

Interest rates rose, and markets reacted. 

With inflation running well above the target rate, the Federal Reserve (Fed) chose to raise the federal funds rate last week. Interest rates are one of the primary tools the Fed relies on to influence the economy. Generally, rate hikes are blunt tools that can help slow demand and ease price increases. 

The rate hike echoed across financial markets. 

In the bond market, Treasury rates rose as investors anticipated additional Fed hikes, reported Elizabeth Stanton of Bloomberg. By the end of the week, the rate on two-year U.S. Treasury notes was 4.76 percent, and the rate for 10-year Treasuries was at 5.01 percent. 

Coupon rates are also higher in the tax-exempt market where high-quality, long-term municipal bonds yield more than 5 percent, according to Andrew Bary of Barron’s. He reported, “Tax-equivalent yields on long-term munis with 30-year maturities are 8 percent to 10 percent, depending on the tax rates in states where investors reside.” 

Rising interest rates can affect stock markets, too. Higher borrowing costs may cause companies to delay projects, spend less on research and development, cancel acquisitions, or take other steps that may affect earnings and future growth. 

The relationship between inflation, interest rates, bonds, and stocks is not always straightforward. Markets are constantly adjusting to new information, and the direction of one market can influence another, sometimes in ways investors do not anticipate. For now, inflation is a key influence. If price pressures continue, the Fed may keep rates higher for longer. 

 Last week, the Dow Jones Industrial Average and Standard & Poor’s 500 Index finished lower, while the Nasdaq Composite Index gained. The yield on the 30-year U.S. Treasury bond ended the week at 5.34 percent. 

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.  

COUPONS AND YIELDS AND INTEREST RATES, OH MY! In the old days, when investors agreed to lend their money to the U.S. government or a state government or a company, they received a paper certificate.  The value of the bond was printed on the certificate and known as the bond’s “face value”. 

The Rothschild Bank Archive explained, “The bonds themselves were often beautiful examples of iconography and engraving. Each bond was printed with a sheet of coupons and every six months the bondholder would cut out the next coupon and present it to the Bank or paying agent in exchange for the designated dividend payment. The coupon number would be recorded in a ledger, the coupon cancelled...” 

After the last coupon was cashed, the bond matured, and the bondholder’s original investment was expected to be returned. 

What is a coupon rate? 

A bond's coupon rate is the annual payment expressed as a percentage of the bond's face value. While the practice of clipping coupons is long gone, the term “coupon rate” is still used to describe amount of interest a bond provides relative to its price when issued. For example, a bond with a $1,000 face value and a $50 annual coupon has a coupon rate of 5 percent.  

What is yield? 

A bond’s yield is the amount of income it pays relative to the current market price. If the coupon rate offered on new bonds rises from 5 percent to 6 percent, the market price for a bond with a 5 percent coupon rate falls. Investors generally won't pay as much for a bond that offers less income than comparable new bonds. 

As a result, a bond’s price may fall until its yield becomes competitive. It works the other way, too. When the coupon rate offered on new bonds falls to 4 percent, the market price for a bond with a 5 percent coupon rate rises.  

Ideally, a bond buyer wants a “yield” that equals the coupon rate on new bonds. For example, if the new rate is 6 percent, an investor might pay about $833 for a bond with a 5 percent coupon rate. At that price, the bond's current yield would be about 6 percent.  

What are interest rates? 

Interest rates reflect the cost of borrowing. The Federal Reserve, which is the central bank of the United States, sets the federal funds rate. That’s the interest rate banks charge to borrow from each other overnight loans.

When the Fed raises the federal funds rate, the cost of borrowing often increases, and the interest rate charged by credit cards and various types of loans may increase. The interest rate paid on bank accounts also increases. When the Fed lowers the federal funds rate, the cost of borrowing tends to decrease, reported Jessica Dickler of CNBC. 

Bonds are loans. Generally speaking, when the federal funds rate rises and the cost of borrowing increases, new bonds offer higher coupon rates to attract investors. When the federal funds rate falls and the cost of borrowing declines, new bonds tend to offer lower coupon rates. 

If you have questions about coupons, yields or interest rates, please get in touch. 

WEEKLY FOCUS – THINK ABOUT IT

“Since 2000 net government debt in America and Britain has tripled as a share of GDP. In France and Japan, it has doubled. The pile keeps growing: seldom outside wartime or recessions have rich-world deficits been higher than they are today… 

In October 2025, The Economist calculated that if America and Britain had to immediately refinance all their debts at prevailing five-year bond yields, they would each need higher taxes or spending cuts worth 2.3 percent of GDP just to stop debt from rising as a share of the economy. Today, with yields higher, the number in America has more than doubled, to 4.7 percent.” 

—The Economist, September 17, 2026  

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision. 

Sources:

https://www.federalreserve.gov/faqs/money_12856.htm?

https://www.bloomberg.com/news/articles/2026-09-18/treasuries-fall-as-fed-rate-hike-outlook-dents-sentiment or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-21-26-Bloomberg-Treasuries-Fall-as-Fed-Rate-Hike%20-%202.pdf

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=202609

https://www.barrons.com/articles/muni-bonds-yielding-5-percent-rival-stocks-438f044b? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-21-26-Barrons-Muni-Bonds-Are-Yielding%20-%204.pdf

https://www.goldmansachs.com/insights/articles/how-higher-rates-affect-us-stocks

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-21-26-Barrons-DJIA-S&P-Nasdaq%20-%206.pdf

https://www.rothschildarchive.org/collections/rothschild_faqs/old_rothschild_bonds

https://www.investopedia.com/terms/f/facevalue.asp

https://www.investopedia.com/terms/m/maturitydate.asp

https://www.investopedia.com/terms/c/coupon-rate.asp

https://www.federalreserve.gov/economy-at-a-glance-policy-rate.htm

https://www.cnbc.com/2026/09/16/fed-rate-hike-consumer-borrowing-and-savings-rates.html

https://www.economist.com/leaders/2026/09/17/markets-are-waking-up-to-the-rich-worlds-reckless-borrowing or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-21-26-Economist-Markets-Are-Waking-Up%20-%2013.pdf