Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee

May 5, 2026Letter to the SecretaryDear Mr. Secretary,For much of the period since the TBAC last met in early February, financial markets have been highly influenced by oil prices, which are up nearly 60% since the start off the Iran conflict, and nearly 80% since the start of 2026. With other commodity prices also rising, the broad commodity index is now above the pandemic-period high, set in 2022. The impact of the surge in commodities has been felt most acutely in global rates markets. Rates market sentiment heading into the conflict was that central bank policy rates would be unchanged or lower by end-2026. The increase in inflation expectations since the start of the war has now forced a significant hawkish repricing of central bank policy, most notably in Europe.