September 15, 2026 | 10:04 am
TEMPO.CO, Jakarta - The turbulence that had briefly subsided has returned to global financial markets. Government bonds across major economies sold off again on Thursday and Friday, September 10-11, 2026. The yield on 10-year United States Treasuries surged towards 5 percent, while the 30-year yield reached its highest level since 2007. The trigger was another sharp rise in oil prices above the psychologically important threshold of US$100 a barrel.
This was the consequence of the escalation in the US-Iran conflict over the past two weeks. Markets are once again pricing in the possibility of a prolonged war. Bond prices have fallen because a fresh inflationary surge could force central banks to keep interest rates higher for longer—or even raise them further. The probability of the Federal Reserve increasing its policy rate on September 16 has now risen above 70 percent.
As a result, last week’s market turmoil looked more dangerous than the bond sell-off at the beginning of September. Oil prices had not yet risen so violently then. Now, expensive energy threatens to intensify inflation and trigger monetary tightening across several economies. The specter of another high-interest-rate era is drawing closer. The cost of capital for businesses will rise, as will the burden of car loans and mortgage repayments.
For Indonesia, the risks come in several layers. Higher oil prices immediately put pressure on the rupiah in the foreign-exchange market. Indonesia imports about 1 million barrels of oil a day. Consequently, every US$10 increase in the price of oil could add roughly US$3.6 billion to the country’s annual foreign-currency requirements, even after allowing for some offset from higher oil, gas, and other commodity revenues.
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