Regan Capital CIO calls for 50-basis-point fed hike as long-term yields surge

Regan Capital CIO calls for 50-basis-point fed hike as long-term yields surge

Proactive

Mon, September 14, 2026 at 6:49 PM GMT+3

Regan Capital CIO Skyler Weinand joined Steve Darling from Proactive to discuss his outlook on U.S. monetary policy, interest rates and fixed-income markets, arguing that the Federal Reserve should implement a 50-basis-point rate increase at its upcoming meeting to help stabilize the bond market and bring longer-term yields lower.

Weinand noted that long-dated Treasury yields have continued to climb, with the 10-year Treasury yield recently reaching approximately 5% and the 20-year Treasury bond trading near 5.45%. In his view, those elevated rates reflect growing concerns about inflation, government borrowing and future supply pressures in the bond market.

According to Weinand, financial markets are currently pricing in only an 80% to 85% probability of any rate increase at all, leaving significant uncertainty around the Federal Reserve's next move. He believes a stronger policy response would help reinforce the Fed's commitment to controlling inflation while easing pressure on longer-term interest rates.

A major variable, however, is politics. Weinand pointed out that Federal Reserve governors are appointed by the executive branch, creating the potential for political considerations to influence monetary policy decisions. He suggested that if policymakers prioritize economic data—including inflation and employment trends—the case supports a rate increase of between 25 and 50 basis points. If political considerations dominate, however, the Fed could adopt a more dovish tone or even begin discussing future rate cuts.

Turning to investment strategy, Weinand said investors should focus on the shorter end of the yield curve, particularly securities with maturities in the two-to-three-year range. He highlighted government-guaranteed agency bonds and highly rated AAA securities as attractive opportunities, offering yields between 5% and 6% while limiting exposure to interest-rate volatility.

He cautioned against extending duration too far out the curve, noting that the spread between two-year and ten-year Treasury yields remains relatively flat at roughly 35 to 40 basis points. In his view, investors are not being adequately compensated for taking on the additional risk associated with longer maturities.

00:00 Skylar Wining

What the market really needs here is actually two hikes. They need 50 basis points of hikes to bring long-end interest rates down. We have 5% 10-year, the 20-year bonds hitting about 545 this morning.

00:15 Host

Hey, welcome back inside our Proactive News Room and joining me now is Skylar Wining. He is the Chief investment officer for Reagan Capital.

00:23 Host

And Skylar, it's great to see you again. How are you?

00:26 Skylar Wining

Good, sir. Thanks for having me.

00:27 Host

Good, lots. Yeah, lots of stuff to talk about. There's so many uh things going on around the world these days. So, why don't we start with uh the the the Fed's decision. Uh strong uh employment, uh elevated inflation. Tell me a little bit about what you're seeing from the Fed.

00:42 Skylar Wining

Big meeting coming up this Wednesday is a decision 2:00 p.m. Eastern. And so, you know, we're a little bit nervous that they don't hike rates. Uh the market has a a hike priced in. And what the market really needs here is actually two hikes. They need 50 basis points of hikes to bring long-end interest rates down. We have 5% 10-year, the 20-year bonds hitting about 5:45 this morning. So, in order to get the market at ease a little bit, we actually need the Fed to start hiking and doing it really quick.

1:13 Host

Yeah. Uh there's obviously a uh a president who likes to have things done in a certain way and and with the Fed's decision, I'm sure we'll hear lots as we lay it up to this Wednesday. So, uh is that a concern for you that that the Fed will follow the advice or will continue to to do what it's been doing for the last little while and just try to, uh, you know, guide with the way the market is actually looking?

1:32 Skylar Wining

That's the wild card is that you have 12 decision makers at the Fed, but most of them are executive branch appointees. You have seven Fed governors, you have four rotating voters, those are the regional presidents, and then you have one regional president, John Williams, the New York Fed president, who's always a voter. So, the bulk of the voters this Wednesday are driven by the executive branch. And that's really the wild card is whether or not politics play in. And that's why I think the market isn't pricing in a full hike. It's it's only pricing in, you know, 80, 85%. So, if the Fed is playing to politics here, and if they're following Trump and the administration, they don't do anything. And if anything, they come out being dovish saying, hey, we actually are thinking about lowering rates here. But if they do what they're supposed to be doing and five uh follow jobs and where inflation is going, they should be hiking 25 if not 50 basis points.

2:38 Host

Okay. All right, well we'll keep an eye on on what happens there for sure. So, let's talk a little bit of it now on a on a sort of go forward basis, what fixed income investments should we be focusing on and uh and and as far as the the the the curve in terms of duration. Like talk to me a little bit about what you're seeing in the market.

2:55 Skylar Wining

Yeah, we're answering tons of questions, especially in the last couple weeks with A investors that are frustrated that bonds are down again this year. B, investors are thinking about how much interest rate risk and duration should they be taking on given how high rates have gotten. Where you can put money to work at five if not 6% in government guaranteed agency assets, agency mortgage back securities. So, you have a lot of opportunity out there to put money to work in really safe paper at 6%. But I would caution investors from taking on too much duration or too much interest rate risk here, because the curve is still very, very flat. Okay? that two to tens steepener, or that two to tens basis, is from a historical perspective, it's still very, very low at 35 to 40 basis points. So stay short, stay in that two to three year part of the curve, which in our opinion is the sweet spot in terms of risk reward.

3:57 Host

Okay. How does AI debt issuance, US government bond ensure issuance rather, deficits, foreign buying, there's so many things that really play into where interest rates are going and where they're heading, where they may stay the same or move up or move down. There's there's just so many factors that you have to look into when you're especially in an economy that we have right now where people are unsure.

4:15 Skylar Wining

Yeah, you have a lot of supply coming out between the United States government, AI Hyperscalers, as well as foreign borrowers. Uh Asia and Europe coming out and needing to issue debt in order to fund their operations. So, that's part of the reason we continue to want to stay in that two to three year part of the curve is that most of that issuance, especially on the the corporate side and on the foreign government side is going to be in that five to 10 year part of the curve. Okay? So you might see very elevated five to 10 year rates over the next six months. But that two to three year part of the curve where you can make 5, 6% in agency government guaranteed and very high quality AAA paper. Stay there for the time being until the curve meaningfully steepens out.

4:53 Host

Yeah. And lastly, uh Skylar, I just want to ask you, you mentioned that you're getting a lot of inbound calls from people, they're asking a lot of questions. Are there main concerns? Is everyone nervous? Is that a is that really sort of the keyword that we're having right now that people are just nervous about where we're at economy-wise and where we're going?

5:06 Skylar Wining

We're in unprecedented territory on the fixed income side with yields at 5 to 6% here that most investors haven't seen since pre-great financial crisis. So we're talking 20 plus years over a generation of missing yields, right? And so folks are really looking for guidance as to, well, when do I step back into the pool and maybe increase my fixed income allocations? And we think now's the time, but also to stay in that two to three year part of the curve. Don't go out and buy 10 or 30 year debt because that's where the issues might be, whether it's growth, inflation, a buyer strike on that part of the curve, who knows. But folks need help because they haven't been in this environment in a long time.

5:50 Host

Absolutely. Makes a lot of sense. Skyler, thanks for your insight. Really appreciate it. And uh we'll look forward to seeing what happens uh when the big announcement comes out on Wednesday. So, thanks for your time. Really appreciate it.

5:58 Skylar Wining

Thank you.

5:59 Host

All right, there's Skyler Wynon. He is the chief investment officer for Regan Capital.

Weinand also emphasized that a substantial wave of debt issuance could continue putting upward pressure on longer-term yields. He pointed to record borrowing by the U.S. government, significant capital requirements from AI infrastructure and hyperscale data center projects, and increased borrowing activity from issuers across Asia and Europe. Together, these factors are creating a supply-heavy environment that could weigh on the five-to-ten-year segment of the bond market over the coming six months.

Given those dynamics, Weinand believes investors should remain positioned in shorter-duration assets until the yield curve steepens more meaningfully and offers better compensation for longer-term risk.

He added that today's fixed-income environment presents opportunities not seen in decades, with government-backed and high-quality fixed-income securities yielding 5% to 6%—levels investors have not enjoyed since before the Global Financial Crisis.

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