What history says about longer-term bond yields after the first Fed hike

What history says about longer-term bond yields after the first Fed hike What history says about longer-term bond yields after the first Fed hike Bond yields typically rise, meaning their value falls, after the first Fed hike of a cycle. /iStockphoto If the Federal Reserve hikes interest rates in an effort to slow down the rapid rise in longer-term bonds yields, history shows it probably won’t be a success. on worries over Middle Eastern oil supplies, has emerged as a major concern, even as core CPI on a year-over-year basis fell to its lowest reading since early 2021 in August. Citi’s global equity strategy team led by David Groman plotted the course of 10-year yields around first Fed hikes. With the notable exception of 1997 — when the Fed hiked once, went on hold, and then cut rates the following year due to contagion from the Asian financial crisis — the pattern is for yields to rise about 50 to 100 basis points in the year after the first Fed hike.

Video 91/1 Skip Ad Continue watching after the adVisit Advertiser websiteGO TO PAGE Vertiv's CEO on Nvidia, AI, Growth, and More Play video: Vertiv's CEO on Nvidia, AI, Growth, and More The pattern of 10-year yields after the first Fed hike Citi/DataStream/MSCI “While stocks tend to wobble around the first hike, it has typically paid to buy into any volatility with a one-year horizon. The same can’t be said for bonds, where it has generally paid to sell U.S. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.

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Former Fed governor and ex-Trump White House official Stephen Miran has been arguing, both on CNBC and on social media, that a hike would be counterproductive. Citrini’s James Van Geelen, in a Substack message, said a hike would help longer-duration government bonds. Copyright ©2026 MarketWatch, Inc.

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