September 2026 TSP returns were negative for nearly every fund. The G Fund was the only core fund to post a gain, while rising interest rates put pressure on both stocks and bonds. All 11 Lifecycle (L) Funds also lost ground.
What Happened to the TSP in September?
The Federal Reserve raised its benchmark interest rate by a quarter point on September 16, bringing its target range to 3.75%–4.00%. By the end of the month, the 10-year Treasury yield had climbed to roughly 5.3%.
Higher rates can pressure both stocks and bonds, and September reflected that challenge. The Dow Jones Industrial Average fell about 4.3%, while the S&P 500 declined roughly 0.5%. The Nasdaq Composite gained about 1.9%, showing how technology stocks helped offset weakness elsewhere in the market.
The C Fund, which tracks the S&P 500, fell 0.35%. The S Fund, which holds smaller U.S. companies, lost 3.86%. The I Fund, representing international stocks, declined 2.30%.
September 2026 TSP Returns
| Fund | Monthly Return | YTD Return | 12-Month Return |
| G Fund | 0.40% | 3.41% | 4.51% |
| F Fund | -2.59% | -2.75% | -1.77% |
| C Fund | -0.35% | 12.73% | 15.72% |
| S Fund | -3.86% | 11.62% | 11.82% |
| I Fund | -2.30% | 16.45% | 23.06% |
Data as of September 30, 2026. Source: TSPDataCenter.com.
Why the G Fund Gained While the F Fund Fell
The G Fund and F Fund are both considered more conservative TSP options, but they respond differently to interest rates.
The F Fund invests in bonds whose market prices can fall when interest rates rise. That helps explain its 2.59% loss in September.
The G Fund works differently. It invests in special-issue Treasury securities backed by the federal government. Its principal does not fluctuate with market interest rates, and its interest rate adjusts monthly. That structure allowed it to post a 0.40% gain while the F Fund declined.
What September 2026 TSP Returns Mean for Your Retirement
A down month doesn’t automatically mean you should change your TSP allocation. Investors with years until retirement may continue contributing through market declines. Those closer to retirement, however, have less time to recover from losses, especially if they expect to withdraw money soon.
September also showed that bonds don’t always offset stock-market declines. Understanding how your TSP allocation fits into your retirement income plan matters more than reacting to one month’s returns.
Have Questions About Your TSP? A Federal Retirement Consultant (FRC®) can help you review your TSP allocation alongside your pension, retirement date, and other sources of retirement income.
