Recent data show the 5-year Treasury yield trading near 4.52–4.55% in early September 2026, up from spring lows amid persistent core inflation above the Fed’s 2% target and a higher estimated neutral policy rate. Heavy Treasury issuance tied to federal debt above $40 trillion, combined with strong corporate borrowing for AI infrastructure, has lifted term premium and anchored intermediate yields despite the federal funds rate holding at 3.50–3.75%. Hawkish communications from the new Fed leadership and resilient labor data have reduced expectations for near-term rate cuts, supporting the view that any decline before year-end will likely be modest. Traders are monitoring the September CPI release and upcoming FOMC meetings for signals that could alter the path.