The Price of Money Went Up Everywhere This Week: US Yields at a 19-Year High, a Hormuz Offer Rejected, and the Nifty's Seventh Weekly Fall in a Row
Between 21 and 26 September 2026 the US 10-year Treasury yield touched its highest level since 2007, Norway raised rates and the Fed signalled more hikes, Iran offered a seven-day plan to reopen the Strait of Hormuz and the US President rejected it, Xi Jinping's state visit bought a two-month US–China trade truce, and India's Nifty fell for a seventh straight week as foreign investors sold ₹11,490 crore and the country's forex reserves dropped $14.9 billion in one week. What connects them, what the numbers say, and the ten dates that decide the next fortnight — from a three-day bank strike to the RBI's 7 October policy.
If you read only the front pages this week, you saw three separate stories: a defiant Iranian president at the United Nations, a Chinese state visit to Washington with plenty of ceremony, and India's foreign minister speaking of the "weaponisation of everything". The market pages ran a single story underneath all three. The price of money rose almost everywhere. The US 10-year Treasury yield reached its highest level in 19 years, one more central bank raised rates and another said more hikes were likely, and money left emerging markets for the safety of US bonds paying above 5%. For Indian households, that is the story that reached their portfolios, deposits and the rupee. This piece sets the week out in order, attaches the numbers, and ends with a calendar of what comes next.
Written on 28 September 2026. Market figures are closing levels for Friday 25 September, as reported by the sources listed at the end. Where sources disagree, the range is given. Flows marked "provisional" are exchange data, and depository figures will differ. This is explanation, not advice, and nothing here is a forecast.
5.2% — US 10-year yield on 24 Sept, highest since 2007 · $104.32 — Brent on 25 Sept, after $100.34 on Monday · 23,140.50 — Nifty 50, its seventh weekly fall in a row · −₹11,490 crore — foreign investors' net sales for the week (provisional) · ≈ 95.8 — rupee per dollar on Friday (provisional) · $765.90 billion — forex reserves, down $14.88 billion in a week.
1. The real story: money got more expensive, almost everywhere
On 24 September the US 10-year Treasury yield touched its highest level since June 2007, above 5.2%, and the 30-year reached its highest since 2004, around 5.49%. By Friday the 10-year had eased to about 5.17%. A 10-year US government bond now pays more than 5% in dollars with almost no credit risk. Every other asset in the world, Indian shares included, has to offer a better return than that to attract money.
The yields followed the central banks. The US Federal Reserve raised its policy range by 25 basis points to 3.75%–4.00% on 16 September. It was the Fed's first hike since July 2023 and the first under Chair Kevin Warsh. The vote was unanimous, and the median official now expects rates to end 2026 at 4.1%, up from 3.8% in June. Fed Governor Michael Barr said on 23 September that "further policy adjustments" could be expected, and futures markets priced roughly a 70% chance of another hike in October. Elsewhere:
| Central bank | Latest decision | Policy rate |
|---|---|---|
| US Federal Reserve (16 Sept) | Raised 25 bp, unanimous | 3.75%–4.00% |
| European Central Bank (10 Sept) | Raised | 2.50% (deposit rate) |
| Bank of England (16 Sept) | Held, but three of nine voted to raise | 3.75% |
| Bank of Japan (18 Sept) | Raised, 7–2 vote | 1.25%, a 31-year high |
| Norges Bank (24 Sept) | Raised 25 bp, signalled more | 4.50% |
| Swiss National Bank (24 Sept) | Held | 0% |
| Riksbank, Sweden (24 Sept) | Held, hawkish tone | 1.75% |
| People's Bank of China (21 Sept) | Loan prime rates unchanged, 16th month | 3.0% (1-yr) / 3.5% (5-yr) |
| Reserve Bank of India (5 Aug) | Held, neutral stance; next decision 7 Oct | 5.25% |
The pattern is plain. The world's major central banks, with China's the exception, are either raising rates or talking about it. The cause is the one this site has tracked since March. Oil above $100 feeds straight into fuel and transport costs, and central banks that let inflation expectations drift in 2021–22 are not willing to repeat the mistake. US inflation is still high: July PCE, the Fed's preferred measure, was 3.7% headline and 3.3% core. The next reading comes out on 30 September.
The US economy is giving the Fed no reason to stop. Weekly jobless claims fell to 197,000 in the week to 19 September, close to historic lows. Consumer mood is poor: the University of Michigan's September sentiment index fell to 48.1. Wall Street still had its first winning week in three. The S&P 500 rose 1.2% to 7,743.41, the Nasdaq 2.1% to 27,068.72 and the Dow 0.3% to 51,828.62. Large US technology companies can still attract money when the cost of money rises. Emerging markets, as the next section shows, struggle to.
2. Iran: an offer on Friday, a rejection on Saturday
The oil market spent the week trying to price a diplomatic process that kept opening and closing.
- 21 September: Brent fell 3.4% to settle at $100.34. Saudi oil was moving again through the Gulf after drones shut the kingdom's East–West pipeline earlier in the month; Saudi flows through Hormuz averaged 2.9 million barrels a day up to 18 September, against 0.7 million in August.
- 23 September: Iran's President Masoud Pezeshkian told the General Assembly that Iran was ready for talks but would not accept "the language of force".
- 24 September: Bloomberg reported that US and Iranian negotiators in New York were discussing a phased reopening of the Strait of Hormuz in return for the US lifting its naval blockade of Iranian ports.
- 25 September: Foreign Minister Abbas Araghchi set out a seven-day sequence. Hormuz would reopen on day six and nuclear talks would begin on day seven. In return the US would lift the blockade, remove sanctions on Iranian oil sales and agree a ceasefire that includes Lebanon. The plan resembles the 60-day interim deal of June, which collapsed when shipping attacks resumed.
- 26 September: the US President said, "They made a proposal but I rejected it." Iran says it is still waiting for a "definitive" US answer.
Brent finished Friday at $104.32, down 2.1% on the day and up less than 1% on the week. It had risen as high as about $106.60 at Thursday's settlement, with Houthi strikes on Saudi flows adding to the pressure. Friday's fall came before the rejection, so the first trading session after it, today's, is the one to watch. US crude (WTI) fell about 8% over the week to $92.41. The gap between the two benchmarks widened sharply on talk of a US ban on diesel exports. That detail matters to India. Indian refiners pay Brent-linked prices, and a US that keeps its own fuel at home tightens the market India buys in.
| Oil, week of 21 September | Brent ($/barrel) | What moved it |
|---|---|---|
| Mon 21 Sept | 100.34 (−3.4%) | Saudi exports rerouted through Hormuz; talk of US–Iran contact at the UN |
| Thu 24 Sept | ≈ 106.60 | Houthi strikes on Saudi flows; Treasury yields at 19-year highs |
| Fri 25 Sept | 104.32 (−2.1%) | Reports of phased US–Iran talks; diesel-export-ban talk hits WTI harder |
| Sat 26 Sept | market shut | US rejects Iran's seven-day plan |
Thursday's level is derived from Friday's settlement and its reported $2.28 fall. One wire report described Brent as "below $98" on Friday, which conflicts with the $104.32 settlement published by others; it may refer to a different contract month and is not used here.
3. China: a state visit that bought two months
Xi Jinping's state visit to Washington from 23 to 25 September was his first since 2015. It produced one concrete result. Treasury Secretary Scott Bessent said the US–China trade truce, known as the Busan arrangement, which was due to expire on 10 November, would be extended to 10 January. The truce covers American access to Chinese rare earths and Chinese access to some US chips. The two leaders also acknowledged, without a formal agreement, the case for working together on the risks of AI. CNN's verdict was heavy on pomp and light on substance, and that fits the numbers. The Hang Seng fell about 1% on the week to a two-month low of 24,510.09, and the Shanghai Composite slipped about 0.6% to 3,888.37 ahead of the holiday. Mainland markets now close for Golden Week from 1 to 7 October.
Why India should care: a two-month truce means Chinese exporters are not about to flood third markets with goods priced out of America. But it is two months, not a settlement, and 10 January now sits on the same calendar as the next US tariff decisions on India.
4. India and Washington: one law, one deal, and a 30-day clock
India's diplomatic week in New York ran on two tracks that point in opposite directions.
The first is the Sanctioning Russia and Iran Act, signed on 18 September. It lets the US impose tariffs of up to 100% on the five largest buyers of Russian oil and gas that keep buying after a 30-day window. India is the second-largest buyer after China. On 23 September, S. Jaishankar raised India's concerns about the law with Secretary of State Marco Rubio. The Ministry of External Affairs said India would take all necessary steps to protect its economic interests and energy security. The US named no countries this week and imposed no tariffs. Counting from the 18 September signature, the 30-day window closes around 18 October. Business Standard reported on 21 September that Indian refiners may cut Russian cargoes in response.
The second track is the trade deal. Commerce Minister Piyush Goyal said on 25 September that it was "almost done and dusted", and repeated that India will sign once the terms give its exporters an edge over regional competitors. A senior State Department official put it at "90 per cent-plus". Goyal meets US Trade Representative Jamieson Greer at the G20 trade ministers' meeting in Milwaukee on 30 September and 1 October. Rubio is due in India in October.
Jaishankar's General Assembly address on 26 September set out the case India is making. He said the world is seeing the "weaponisation of everything", with finance, supply chains, markets and technology all used as leverage. He described a four-part crisis of food, fuel, fertiliser and finance that hits the Global South hardest, and developing countries suffer the costs of distant conflicts they have little say in. He condemned attacks on merchant ships that have killed Indian seafarers. Without naming Pakistan, he called it a "serial practitioner of terrorism", and he repeated India's call for Security Council reform. Russia's foreign minister reaffirmed support for India's bid for a permanent seat.
5. Ukraine: a truce offer on energy, no date
After meeting the US President on 22 September, Ukraine's President offered on 23 September to stop striking Russian refineries if Russia stops hitting Ukraine's power, heating and water systems. Rubio said both sides were interested in a limited energy and grain ceasefire. No list of sites, start date or monitoring arrangement has been published, and Russian drones hit Kyiv the same day. Ukraine's General Staff reported 221 clashes on 26 September, concentrated around Pokrovsk and Kostiantynivka. For oil markets, the refinery half of this matters most. Ukrainian drone strikes on Russian refineries have tightened diesel supply this year, so a pause, if it ever starts, would ease a pressure that runs in parallel with Hormuz.
6. India's markets: seven weeks down, and who did the selling
| Week to 25 September 2026 | Close | Weekly move |
|---|---|---|
| Nifty 50 | 23,140.50 | −205.90 (−0.9%) · 7th weekly fall in a row |
| Sensex | 73,895.74 | −399.22 (−0.5%) |
| India VIX | — | +6.9% |
| Rupee (provisional) | ≈ 95.80 a dollar | ≈ 16 paise stronger than 95.96 on 18 Sept |
| MCX gold, October | ≈ ₹1,50,850–1,50,900 per 10 g | sources differ slightly; IBJA 24-carat ₹1,52,113 |
| Brent | $104.32 | less than +1% |
The Nifty has now fallen for seven consecutive weeks and is 3.9% below its end-August close of 24,080.40. By one count it is the longest weekly losing streak since February–March 2020. The damage was in the sectors foreign investors own most heavily. Nifty IT fell 2.4%, Financial Services 1.6% and Bank 1.4%. Realty rose 3%, Consumer Durables 1.1% and Pharma 1.1%. Among Nifty stocks, Bharti Airtel (−5.7%), Trent (−5.5%) and Infosys (−4.9%) fell most, while Coal India (+4%), ITC (+2.6%) and Eternal (+2.5%) led the gainers. It was a defensive rotation, not a collapse.
Net sellers for a sixth straight week; bought on one day only (provisional)
Net buyers on all five days
Foreign vs domestic institutions, provisional exchange data
These flows explain the market. Foreign investors sold on four of five days. Domestic institutions, which means mostly mutual funds carrying monthly SIP money, bought on all five, and bought more than the foreigners sold. That is why a week with a 19-year high in US yields, oil near $105 and a sanctions law pointed at India produced a fall of under 1% rather than a rout. Depository (NSDL) data tells the longer story. Foreign portfolio investors had withdrawn about ₹20,974 crore from Indian equities in September by around 18 September, and about ₹2.45 lakh crore in calendar 2026 so far, against ₹1.66 lakh crore in the whole of 2025.
7. The rupee and the reserves: what the RBI spent
The rupee held near 96 because the RBI spent reserves to keep it there. In the week to 18 September, India's forex reserves fell $14.88 billion to $765.90 billion, the sharpest weekly drop since November 2024. Almost all of it came from foreign-currency assets, down $14.82 billion, the usual sign of central-bank dollar sales, although revaluation also plays a part. Reserves are still $63.33 billion higher than a year ago and $74.79 billion above March 2026, so the buffer is large. The point is that it is being used. The rupee's record low was set in May, reported at between 96.84 and 96.96, and the currency has not returned there.
RBI Deputy Governor Poonam Gupta argued on 23 September that there is a fair case for the rupee to stabilise and even appreciate. Her reasons: the current account deficit is well below prudent limits (it was $4.2 billion, or 0.5% of GDP, in April–June), growth is running above 7%, and NRI deposits under the concessional FCNR(B) swap window added to inflows. Business Standard's reading of the RBI's September Bulletin puts it more cautiously: the rupee's gains from those FCNR(B) inflows were dented by the crude spike in the second half of the month. Both points hold. The fundamentals are sound, and oil is the variable that overrides them.
8. The Indian economy underneath: steady growth, tighter liquidity, less borrowing
- Growth and prices. The RBI's September Bulletin records Q1 FY27 GDP growth of 7.8% and August CPI inflation of 4.8%. Core-sector output grew 4.8% in August, down from 5.0% in July and 6.2% a year earlier. Cement (+12.5%) and electricity (+11.6%) were strong; coal, crude oil, natural gas and fertilisers contracted.
- Liquidity is being drained. The banking system's surplus fell from about ₹10.32 lakh crore on 3 September to about ₹4.45 lakh crore on 22 September, partly because rupees paid for the RBI's dollar sales leave the system. The RBI still absorbed ₹75,026 crore through an overnight reverse repo auction on 23 September at a cut-off of 5.24%, so money remains in surplus, just less of it.
- The government will borrow less than budgeted. On 25 September the Finance Ministry set ₹7.86 lakh crore of dated-bond borrowing for October–March, including ₹15,000 crore of sovereign green bonds, over 23 weekly auctions. That takes the full year to ₹15,99,506 crore, about ₹1.2 lakh crore below the Budget estimate of ₹17.20 lakh crore. Treasury bills run at ₹23,000 crore a week in October–December, and the government's overdraft limit with the RBI (ways and means advances) for the second half is ₹50,000 crore. Fewer government bonds to sell supports Indian bond prices at a time when US yields are pulling the other way. For anyone in debt funds or thinking about long-dated government securities, this is the most useful news of the week.
What it means for you
| If you… | What this week changes |
|---|---|
| Run SIPs or hold equity funds | Seven down weeks feels long, but the market has fallen 3.9% since August because domestic buyers are absorbing foreign selling. Your SIP is part of that buying. Stopping it now would sell at the low end of a range you have been averaging into. The fund history pages show how the same funds behaved in 2020 and 2022. |
| Hold IT, banking or telecom stocks directly | These are the sectors foreign investors are selling, and they sit closest to both the US rate story and the tariff story. A notice naming countries under the US sanctions law, expected around 18 October, is the trigger to watch. |
| Have a floating-rate home loan | The RBI held at 5.25% in August. With oil above $100 and the Fed raising rates, a cut on 7 October looks unlikely. Budget on today's EMI, and test a 50 bp rise on the EMI calculator. |
| Are choosing between FDs and debt funds | Lower government borrowing supports Indian bonds; US yields at 5%+ push the other way. If you are locking an FD, today's rate is a reasonable one to take. Do not wait for a better one. Small-savings rates for October–December are due around 30 September. |
| Pay in dollars — fees, travel, EMIs abroad | The rupee is about 1% away from its May low, and the RBI is defending it with reserves. If the payment is fixed and near, size it at today's rate. |
| Hold gold | Global gold fell more than 1% on the week to about $4,285 an ounce, well below January's record of about $5,608, and Indian festive buying has picked up at the lower price. A fixed allocation, rebalanced, still beats trying to time it. |
| Bank with a public-sector bank | See the bank strike on 28–30 September in the calendar below. Private banks work normally. |
The next fortnight: ten dates
| Date | Event | Why it matters here |
|---|---|---|
| 28–30 Sept | Nationwide strike by the United Forum of Bank Unions | Public-sector bank branches are likely shut; HDFC, ICICI, Axis, Kotak and cooperative banks work normally. SBI has waived ATM charges for the strike days. The unions demand a five-day week and implementation of the March 2024 settlement, and threaten an indefinite strike from 26 October. |
| 29 Sept | Reserve Bank of Australia decision | Markets price a hike from 4.35% to 4.60% at over 90% odds — one more tightening in the region. |
| 30 Sept | US PCE inflation (August) and Q2 GDP, third estimate | The number that decides whether the Fed hikes again in October, and so where US yields go. |
| 30 Sept | Tax audit report due date for FY 2025-26 | No CBDT extension had been announced as of the weekend; professional bodies have asked for one, citing the strike. Check the e-filing portal before relying on any extension. |
| ≈ 30 Sept | Small-savings interest rates for Oct–Dec | PPF 7.1%, SCSS and Sukanya 8.2%, NSC 7.7% today. |
| 30 Sept–1 Oct | G20 trade ministers, Milwaukee — Goyal meets Greer | The next step on the India–US trade deal. |
| 1 Oct | LPG and jet-fuel price revision; September GST collections; NRI property TDS by PAN (no TAN needed) | Household fuel costs, and the first read on festive-season consumption. The TDS change was covered in our NRI rules piece. |
| 1–7 Oct | China's Golden Week holiday | Mainland markets shut; Hong Kong trades. |
| 2 Oct | US September jobs report; India's forex reserves for the week to 25 Sept | Indian markets are closed for Gandhi Jayanti; the reserves figure shows whether the RBI kept selling dollars. |
| 4 Oct | OPEC+ meeting | Output policy with Hormuz still restricted. |
| 7 Oct | RBI monetary policy decision | Repo at 5.25%. The question is less whether the rate moves than whether the tone turns more hawkish. |
This was not a week of new wars or new deals. The Iran offer was rejected, the China truce was extended by two months, and the India–US deal is "almost done" again. It was the week the global rise in interest rates reached India's door: US yields above 5%, foreign money leaving, and the RBI spending $15 billion of reserves in a week to steady the rupee. Domestic savers are carrying the market for now. Keep three prices on your screen for the next fortnight: Brent, the US 10-year yield and the rupee. Then watch the RBI's words on 7 October.
Frequently Asked Questions
Why do US bond yields affect Indian shares? A US government bond paying above 5% in dollars is almost risk-free. When it pays more, foreign investors need a higher expected return to hold Indian shares, which also carry currency risk, so some of them sell. That selling, about ₹11,490 crore in the week to 25 September on provisional data, is what pushed the Nifty lower.
Is the fall in India's forex reserves a worry? Not at its current size. Reserves are $765.90 billion, still $63 billion higher than a year earlier. The $14.88 billion weekly fall mostly reflects the RBI selling dollars to steady the rupee, which is what reserves are for. It becomes a concern only if large weekly falls continue for many weeks.
Will the RBI cut rates on 7 October? Nobody can say for sure, and this piece does not forecast. The conditions make a cut hard: oil above $100, CPI at 4.8% in August, the Fed raising rates and the rupee under pressure. Most commentary expects the repo rate to stay at 5.25%.
Are banks closed during the strike? Public-sector bank branches are likely to be affected from 28 to 30 September. Private banks such as HDFC, ICICI, Axis and Kotak, and cooperative banks, are expected to work normally. UPI, net banking and ATMs generally keep running, and SBI has waived ATM charges on the strike days.
Sources
- US yields, dollar and stocks: CNBC Treasury coverage of 23–25 September 2026; Trading Economics (US dollar index, 25 September); Yahoo Finance market live blog and AP's "How major US stock indexes fared" of 25 September 2026; Bloomberg on jobless claims, 24 September 2026; University of Michigan final September sentiment as reported by Yahoo Finance.
- Central banks: CNBC and Axios on the Federal Reserve decision of 16 September 2026; Federal Reserve September 2026 calendar; Bank of England Monetary Policy Summary, September 2026; UPI on the Bank of Japan, 18 September; CNBC on the ECB, 10 September; Norges Bank monetary policy meeting page, September 2026; Central Banking on the SNB, Riksbank and Hungary decisions, 24 September; FXStreet on the PBoC loan prime rates, 21 September; Commonwealth Bank on RBA pricing.
- Oil: World Oil and CNBC, 21 September 2026; BOE Report (Reuters), 25 September 2026; CNN (14 September) and Bloomberg (16 September) on the Saudi East–West pipeline; Energy Connects on OPEC+, 8 September 2026.
- Iran: CNBC and UN News on President Pezeshkian's address, 23 September; Bloomberg via US News, 24 September; AP via The Baltimore Sun on the seven-day proposal, 25 September; NPR, Bloomberg, Al Jazeera, CNN and The Washington Post on the rejection, 26 September 2026.
- China: Bloomberg, NBC News and CNBC on the truce extension to 10 January, 23–24 September; CNN analysis of the state visit, 25 September 2026; Train2Invest weekly market summaries for Asian and European indices, 26 September.
- India–US: The Week and ANI on the Jaishankar–Rubio meeting, 23 September; The Week, 19 September, on the sanctions law's scope; Business Standard, 21 September, on refiners' Russian cargoes; Business Today, 25 and 26 September, on the trade deal.
- Jaishankar's address: The Quint and Organiser, 26–27 September 2026. Ukraine: NPR and Al Jazeera, 23 September; Ukrainian General Staff figures via Mezha.
- Indian markets: Upstox weekly market wrap, 26 September 2026; BBN Times; IANS on FII/DII provisional flows, 25–26 September; Business Standard on NSDL FPI data, 20 September; HDFC Sky on the rupee, 25 September; Subkuz and Whalesbook on MCX gold; Trading Economics for global gold and silver.
- RBI and government: RBI press release on the September 2026 Bulletin, 25 September; Business Today on Deputy Governor Poonam Gupta's remarks, 23 September; Business Standard on the VRRR auction, 23 September; Tribune/ANI on forex reserves, 25 September; Tribune on the H2 FY27 borrowing calendar, 25 September; Tribune on the Q1 FY27 current account; SteelOrbis on August core-sector data.
- Bank strike and 1 October: Upstox, ETV Bharat and India TV, 26–27 September; CareerIndia on the tax audit due date; News24 and Amar Ujala on 1 October changes.
Fast-moving: prices, flows and diplomatic positions can change within hours, and provisional flow data are revised. Where sources disagree, the range is given. Educational analysis only — not investment, tax or legal advice.
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