Blog
The Markets
Keep your eye on your long-term goals.
Batters have one of the most difficult jobs in baseball: keeping their eyes on the ball. It seems straightforward, but there are always distractions, from a pitcher’s pacing to the fans’ heckling. As Crash Davis points out in Bull Durham, “Know what the difference between hitting .250 and .300 is? It’s 25 hits – 25 hits in 500 at-bats is 50 points.”1
An investor’s job is difficult, too, especially during election season. For investors, the challenge is to stay calm and focus on their long-term goals. It isn’t easy amid the chaos of political noise when emotions are running high. It can help to remember that stocks have trended higher historically regardless of which party is in power or how the government is configured.
While you cannot invest directly in an index, the Standard & Poor’s 500 Index illustrates the point well. In January 1945, the Index was trading at 13.50.2 Last Friday, it finished at 7,743.40.3 There were a lot of ups and downs in between those years, but stocks trended higher overall.
Historical stock market performance doesn’t mean politics is irrelevant
The United States government sets policies and appoints officials that affect Americans’ lives every day. For the 2026 midterms, economic issues are top of mind for many voters, according to Pew Research.4 The economic issues Americans are thinking about include:
- The cost of living. Most participants in a Pew Research survey said they were very concerned about the cost of healthcare, food, consumer goods, housing, gasoline, and electricity. They also were focused on the role of artificial intelligence in the economy and the difficulty many people are having finding work.5
“By a wide margin, voters most want candidates running for Congress to talk about economic issues – with many specifically mentioning prices and affordability,” reported Andrew Daniller, Andy Cerda, Hannah Hartig and J. Baxter Oliphant of Pew.4
- Social Security funding. “A near-unanimous 97 percent of voters nationwide agree candidates should explain their plans to prevent automatic benefit cuts…this is an intergenerational issue: while current retirees will be impacted immediately by automatic cuts, current workers are paying into a system that will pay them less,” according to a survey conducted by the nonpartisan Peter G. Peterson Foundation.6
Currently, payroll taxes collected to fund Social Securitybenefits do not cover the amount paid out each year. The difference is taken from the Old-Age, Survivors Insurance (OASI) Trust Fund.Projections suggest the trust fund will be depleted in 2032. Unless Congress acts soon, all program beneficiaries will see benefits cut by 22 percent, according to the 2026 Annual Trustees Report.7 The Committee for a Responsible Federal Budget puts the cut at about $16,900 per year for the average couple.8
Americans also are concerned about non-economic issues, including government and leadership, immigration, and war in the Middle East, according to a September Gallup poll.9
Just as hitters can be enticed into swinging at the wrong pitches, investors can be tempted to make portfolio changes at the wrong times. During this election season, remember to keep your eye on your long-term goals. If you have questions about your portfolio or feel a change may be warranted, please get in touch.
Last week, “was a rollercoaster of a week on Wall Street, but stocks closed Friday’s session higher and managed to climb for the week despite the bond yields rising to multi-year highs,” reported Naomi Buchanan of Barron’s.10 The yield on the 30-year U.S. Treasury bond ended the week at 5.49 percent.11
Data as of 9/25/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.2% | 13.1% | 17.2% | 21.3% | 11.8% | 13.7% |
| Dow Jones Global ex-U.S. Index | 0.4 | 12.8 | 18.8 | 17.6 | 6.2 | 6.6 |
| 10-year Treasury Note (yield only) | 5.2 | N/A | 4.2 | 4.5 | 1.5 | 1.6 |
| S&P GSCI Gold Index | -2.3 | -0.5 | 14.6 | 30.7 | 19.8 | 12.4 |
| Bloomberg Commodity Index | -0.8 | 31.6 | 38.2 | 10.9 | 7.4 | 5.5 |
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.
WHAT DO SALT, CATTLE, COINS, AND A SMARTPHONE HAVE IN COMMON? At one time, each played a part in a payment system. In the ancient world, salt and cattle were forms of currency. Today, the wallet app on your phone can pay for your morning coffee. Find out what you know about the history of money by taking this brief quiz.
- In the late 1800s, some stores allowed well-heeled customers to charge purchases using a store token. The tokens included the store’s name or logo, a customer identification number, and a small hole so the customer could string it on a key ring or necklace.12,13 The tokens were often shaped like the goods sold by the issuing store. What were these tokens called?
- A. Razzle dazzle
- B. Charge coins
- C. Credit chits
- D. Plunk downs
- In the 1930s, one industry embraced the idea of charge cards. The card offered customers a more convenient way to pay and provided a 15 percent discount on some sales. What did the industry call its card?12,14
- A. The Rail Travel Card
- B. The Motion Picture Show Card
- C. The Air Travel Card
- D. The Coffee-House Card
- The first multi-purpose credit card was introduced in 1950. It could be used at 28 restaurants and two hotels, and the balance had to be paid off every month.15 What material was the card made of?
- A. Aluminum
- B. Plastic
- C. Cardboard
- D. Celluloid
- Today, contactless payment lets people pay with a debit or credit card by tapping the card, smartphone, or smartwatch on a payment terminal.16 Where was the technology first used?
- A. The United States
- B. South Korea
- C. China
- D.Canada
From salt and cattle to cardboard cards and contactless payments, the way we pay has changed dramatically over time. Who knows what will be in our wallets, or on our phones, a generation from now?
WEEKLY FOCUS – THINK ABOUT IT
“Money is, in some respects, like fire. It is a very excellent servant, but a terrible master.”17
— P.T. Barnum, Entertainment Entrepreneur
Answers: 1) b; 2) c; 3) c; 4) b
Sources:* 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 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.
1 https://www.azquotes.com/quote/1122379
2 https://www.multpl.com/s-p-500-historical-prices/table/by-year
3 https://finance.yahoo.com/quote/%5EGSPC/history/
7 https://www.ssa.gov/oact/tr/2026/tr2026.pdf
8 https://www.crfb.org/blogs/large-benefit-cuts-loom-social-security
9 https://news.gallup.com/poll/1675/most-important-problem.aspx
10 https://www.barrons.com/livecoverage/stock-market-news-today-092526 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-28-26-Barrons-Stocks-End-Volatile-Week%20-%2010.pdf
12 https://www.experian.com/blogs/ask-experian/the-history-of-credit-cards/
13 https://www.creditcollectibles.com/evolution-of-charge-coins-to-credit-cards/
14 https://apex.aero/articles/credit-history-birth-air-travel-card/
15 https://www.dinersclubus.com/home/about/dinersclub/story
16 https://www.globalpaymentsintegrated.com/en-us/blog/2020/09/15/the-history-of-contactless-payments
17 https://www.goodreads.com/author/quotes/201036.P_T_Barnum
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.1
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.2,3
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.”4
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.5
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.6 The yield on the 30-year U.S. Treasury bond ended the week at 5.34 percent.3
Data as of 9/18/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -0.1% | 11.8% | 15.4% | 19.8% | 11.9% | 13.6% |
| Dow Jones Global ex-U.S. Index | -1.1 | 12.4 | 17.3 | 16.3 | 6.3 | 6.7 |
| 10-year Treasury Note (yield only) | 5.0 | N/A | 4.1 | 4.3 | 1.3 | 1.7 |
| S&P GSCI Gold Index | 0.4 | 1.9 | 20.3 | 31.3 | 20.2 | 12.9 |
| Bloomberg Commodity Index | 0.2 | 32.6 | 40.7 | 10.6 | 8.7 | 5.7 |
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.7 The value of the bond was printed on the certificate and known as the bond’s “face value”.8
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…”7
After the last coupon was cashed, the bond matured, and the bondholder’s original investment was expected to be returned.9
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.10
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.8
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.8
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.11
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.12
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.”13
—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 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:
1 https://www.federalreserve.gov/faqs/money_12856.htm?
2 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
4 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
5 https://www.goldmansachs.com/insights/articles/how-higher-rates-affect-us-stocks
6 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
7 https://www.rothschildarchive.org/collections/rothschild_faqs/old_rothschild_bonds
8 https://www.investopedia.com/terms/f/facevalue.asp
9 https://www.investopedia.com/terms/m/maturitydate.asp
10 https://www.investopedia.com/terms/c/coupon-rate.asp
11 https://www.federalreserve.gov/economy-at-a-glance-policy-rate.htm
12 https://www.cnbc.com/2026/09/16/fed-rate-hike-consumer-borrowing-and-savings-rates.html
13 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
The Markets
The influence of supply and demand.
Last week offered a lesson in supply and demand, along with a reminder that financial markets are always looking to the future. As disruptions in the Middle East squeezed oil supplies, rising fuel prices and August inflation data seemed to set the stage for higher interest rates and lower stock prices. Then, Friday’s news that demand for oil may be weakening changed the outlook, and stock markets found a bit of relief.
Here are some highlights from last week:
- There was an oil supply shock. Conflict in the Middle East expanded, further reducing the availability of oil. “For Middle Eastern oil producers, there are fewer and fewer places to hide from Iranian violence. And because of that, oil prices are almost certain to stay high,” reported Avi Salzman of Barron’s.1
- Falling supply pushed fuel prices higher, pressuring inflation. Diesel fuel reached an all-time high of $6.00 a gallon, up from $3.70 a year ago.Diesel is required for “around 70 percent of the movements of freight, rail, agriculture, and construction equipment, and is a key component of domestic inflation when prices rise,” reported Callum Keown and Martin Baccardax of Barron’s.2
- Higher inflation changed the interest rate outlook. Consumer and Producer Price readings for August arrived last week, showing inflation remained high.3,4 As investors considered the possible impact of higher oil prices, the chance of a Fed rate hike in September climbed above 85 percent, according to CME FedWatch.5 In response, the 10-year Treasury yield approached 5 percent.6
- The forecast for oil demand changed. On Friday, the International Energy Agency (IEA) Oil Market Report forecast that global demand for oil will fall more sharply than expected in the latter half of 2026 because of higher prices and economic disruptions.7
Markets welcomed the possibility that weaker demand for oil could eventually ease oil prices and inflation pressures. After four days of declines, stock markets rallied on Friday.
The supply problem, however, has not gone away. The IEA expects oil supply to fall even faster than demand, while global inventories are being rapidly depleted.7 In other words, Friday’s rally did not indicate the oil shock is over. It reflected a change in the outlook, and a reminder that markets care about where prices are today, and where they may be headed tomorrow.
Last week, major U.S. stock indexes finished the week lower, despite advancing on Friday.8 Yields on U.S. Treasuries moved higher across the yield curve.9
Data as of 9/11/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -0.8% | 11.9% | 16.2% | 19.5% | 11.4% | 13.5% |
| Dow Jones Global ex-U.S. Index | -1.2 | 13.7 | 19.7 | 16.9 | 5.9 | 6.8 |
| 10-year Treasury Note (yield only) | 4.98 | N/A | 4.0 | 4.3 | 1.3 | 1.7 |
| S&P GSCI Gold Index | -1.5 | 1.6 | 20.0 | 31.3 | 19.7 | 12.8 |
| Bloomberg Commodity Index | 1.6 | 32.4 | 40.9 | 10.8 | 8.3 | 5.6 |
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.
HERE’S HOW A BOND WORKS. A bond is a loan. When investors buy U.S. Treasury bonds, they agree to lend their money to the government for a specific period of time. In return, the government agrees to pay interest for that period and return the amount borrowed when the bond matures. In the interim, Treasury bond rates may move higher or lower. The market value of the Treasury, which is the value an investor receives if they sell the bond before maturity, will change to reflect current rates.10
How do rates affect bond prices?
There is a question about this on FINRA’s financial literacy quiz that stumps a lot of people every year. It asks: If interest rates rise, what will typically happen to bond prices?11
- They rise.
- They fall.
- They stay the same.
- Nothing. There is no relationship between interest rates and bond prices.
The correct answer is that bond prices fall when rates rise.
There is an inverse relationship between bond prices and interest rates
Imagine that a fictional investor, Chris, buys a 10-year U.S. Treasury for $1,000. It pays 4 percent interest. After a few months, interest rates rise. Newly issued 10-year Treasuries offer 5 percent interest. Chris can hold the bond to maturity (and continue to receive 4 percent interest) or sell it. If Chris sells, the bond will be worth less than the amount originally paid because new bonds have higher rates.
| Bond pays | Bond price | Bond yield | |
| Chris’s original bond | $40 | $1,000 | 4% |
| Newly issued bonds | $50 | $1,000 | 5% |
| Chris’s bond repriced for higher rate | $40 | $ 800 | 5% |
It works the other way, too. Imagine that after Chris buys the bond, interest rates fall, 10-year U.S. Treasuries now pay 3 percent interest. Chris can hold the bond (and receive 4 percent interest until maturity) or can sell the bond. It will be worth more than Chris paid because new bonds have lower rates.
| Bond pays | Bond price | Bond yield | |
| Chris’s original bond | $40 | $1,000 | 4% |
| Newly issued bonds | $30 | $1,000 | 3% |
| Chris’s repriced bond with rate fall | $40 | $1,330 | 3% |
It may help to think of bonds as a seesaw. At one end are bond prices, at the other are interest rates. As one falls, the other rises. If you have questions about bonds, please get in touch.
WEEKLY FOCUS – THINK ABOUT IT
“Where there is great love, there are always miracles.”12 —Willa Cather, Author
* 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 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:
1 https://www.barrons.com/articles/saudi-arabia-pipeline-attack-oil-prices-baad5543 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-14-26-Barrons-The-Saudi-Arabia-Pipeline%20-%201.pdf
2 https://www.barrons.com/articles/diesel-prices-fed-rate-decision-c9076122 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-14-26-Barrons-Record-Diesel-Prices%20-%202.pdf
3 https://www.bls.gov/news.release/pdf/ppi.pdf
4 https://www.bls.gov/news.release/PDF/cpi.PDF
5 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-14-26-CME-Group-Fedwatch-Tool%20-%205.pdf
7 https://www.iea.org/reports/oil-market-report-september-2026
8 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-14-26-Barrons-DJIA-S&P-Nasdaq%20-%208.pdf
10 https://www.investopedia.com/articles/bonds/08/bond-market-basics.asp
11 https://www.finra.org/financial_knowledge_quiz
12 https://www.goodreads.com/author/quotes/881203.Willa_Cather
The Markets
The bond market isn’t happy.
The United States Treasury market is the biggest and most liquid government bond market in the world.1 Throughout 2026, rates on U.S. Treasuries have increased. The benchmark 10-year Treasury started the year at 4.2 percent and ended last week at 4.8 percent. The 2-year Treasury note rose more sharply, from 3.6 percent in January to 4.5 percent last week.2
Rates move higher for a variety of reasons. Alex Rosenberg, Karishma Vanjani, and Martin Baccardax of Barron’s reported on the primary drivers for 2026, which include:
- Sticky inflation. When prices rise, lenders demand higher yields to protect the value of the money they’ll be repaid in the future. In addition, the Federal Reserve has signaled it will keep interest rates high until inflation returns to its 2 percent target.3
- Rising government debt. The U.S. government finances its debts by issuing Treasuries. Higher debt means more Treasuries are sold. The growing supply of Treasuries puts upward pressure on rates.3
- Growing competition from corporate bonds. U.S. companies have been issuing a lot of high-quality bonds to support new projects. The flood of new bonds also pushes rates higher.3
The U.S. is not alone. Rates on government bonds have been rising in countries around the world.3
Higher Treasury rates affect investors and consumers
Rising rates are good news and bad news. The bad news for bondholders is the inverse relationship between interest rates and prices. As rates rise, bond prices fall.4 The good news is that income-oriented investors can purchase bonds with rates that are higher than they’ve been in a long time.
The stinger for consumers is that the 10-year Treasury is the benchmark rate for mortgage rates. In addition, Treasuries influence rates on auto loans and credit cards. When rates rise, borrowing typically becomes more expensive.5 On the plus side, higher rates usually help bring inflation lower.6
Last week, major U.S. stock indexes delivered mixed performance. The Standard & Poor’s 500 Index and Nasdaq Composite were flat, while the Dow Jones Industrial Average declined.7 Yields on most intermediate and longer maturities of U.S. Treasuries ticked higher.2
Data as of 9/4/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.1% | 12.8% | 18.7% | 19.7% | 11.3% | 13.4% |
| Dow Jones Global ex-U.S. Index | 0.0 | 15.0 | 24.3 | 16.9 | 5.9 | 6.8 |
| 10-year Treasury Note (yield only) | 4.8 | N/A | 4.2 | 4.3 | 1.4 | 1.5 |
| S&P GSCI Gold Index | -1.2 | 3.1 | 24.1 | 31.9 | 20.0 | 12.7 |
| Bloomberg Commodity Index | 1.9 | 30.3 | 39.0 | 10.2 | 8.3 | 5.5 |
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.
WHAT DO YOU KNOW ABOUT THE ECONOMIC MENAGERIE? If you’ve ever listened to the financial news, you know that pundits frequently rely on animal metaphors to communicate their points. Bull and bear markets are a case in point. Bulls charge forward and thrust their horns up on the attack, while bears employ downward paw strikes. Bull markets trend higher, while bear markets trend lower. Both animals are unpredictable and strong; volatile like financial markets can be.8 See what you know about the animal metaphors Wall Street relies on by taking this brief quiz.
- Economist John Maynard Keynes believed that people’s instincts and emotions influence their behavior and financial choices. He argued that we spend or invest based on our outlook for the future, and that emotional urges drive economic booms and busts.9 What term did he use to describe this idea?
- A. Herd mentality
- B. Market mood swings
- C. Animal spirits
- D. Bullish instincts
- A central banker who favors moving interest rates higher to fight inflation or cool the economy is known as a hawk.10 What is the term used to describe someone who favors moving interest rates lower to spur economic growth?
- A. A meercat
- B. A dove
- C. A chickadee
- D. A mouse
- There are two theories about investors and dividends. One holds that stock investors are indifferent to whether gains come from stock dividends or gains. The other says that investors prefer dividend-paying stocks because dividends are generally stable and make returns more predictable.11 What is the latter theory called?
- A. The Bird-In-Hand Theory
- B. The Nest Egg Theory
- C. The Cash Cow Theory
- D. The Fishbone Theory
- In business, a company becomes a “unicorn” when it reaches a certain milestone.12 What is that milestone?
- A. A valuation of $1 billion or more
- B. Annual profits of $100 million or more
- C. Annual sales of $100 million or more
- D. A stock price of $5,000
If you have questions about bulls, bears, or other financial jargon, let us know. We’re happy to translate.
WEEKLY FOCUS – THINK ABOUT IT
“An expert is a person who has made all the mistakes that can be made in a very narrow field.”13
― Neils Bohr, Physicist
Answers: 1) c; 2) b; 3) a; 4) a
* 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 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:
1 https://www.axios.com/2026/08/31/bonds-yields-wigglesworth-book
3 https://www.barrons.com/articles/bond-market-strategy-rising-yields-portfolio-c278240d or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-08-26-Barrons-Death-of-a-Safe-Haven%203.pdf
4 https://www.investopedia.com/terms/b/bond.asp
5 https://www.minneapolisfed.org/article/2025/what-drives-consumer-interest-rates
6 https://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
7 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/09-08-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf
8 https://www.investopedia.com/ask/answers/bull-bear-market-names/
10 https://www.kansascityfed.org/research/economic-bulletin/understanding-hawks-and-doves-2018/
11 https://www.investopedia.com/terms/b/bird-in-hand.asp
12 https://www.gsb.stanford.edu/insights/explainer-what-unicorn
13 https://www.goodreads.com/quotes/5-an-expert-is-a-person-who-has-made-all-the