The Overnight RateBagehot meant yields, and he meant it as a joke about investors who’d rather buy anything than sit on two per cent. The FOMC has the same problem from the other side. It can’t get down to two per cent, and in June it stopped pretending it would this year.
- Expected: 2.7% PCE inflation by the end of 2026, the FOMC’s own March projection. Actual: 3.7% in July (CNBC), and the committee’s June revision moved its own number to 3.6% (Fed projections, June 17). A full point off in three months.
- August CPI prints Friday at 8:30. The Street says 3.4% (Kiplinger). Polymarket has the 3.4 bucket at 48%, 3.3 at 31%, 3.5 at 16%. July was 3.4 (CNBC, Aug 12).
- The hike for next Wednesday hasn’t moved off 52% on Polymarket all week, even as the CPI money shifted. Nine of nineteen Fed officials penciled in more hikes this year back in June (TradingKey). I’d argue the June dots already answered Friday’s question. This is the last print before the committee meets, and it decides how loud the answer is.
Threshold: Friday, 8:30
Consensus is 3.4%. On Polymarket, 3.3 and 3.4 together hold 79% of the money, so either of those is a Friday. A 3.5 or higher, 22% combined, puts the hike close to a lock, and I’d expect the 52 to clear 70 by 8:35. A 3.2 or lower, 5%, reopens the hold and makes Waller’s camp look smart. I’ll post the receipt at 8:31 either way, with this paragraph quoted, so nobody has to trust my memory.
The Bug Report
The first ticket. Expected, Actual, Severity, Owner, the crowd’s price at filing, Status. The Owner is always an institution.
TOR-0001
Expected: PCE inflation 2.7% at year end 2026 (FOMC projection, March 2026)
Actual: 3.7% in July (BEA, via CNBC 9/5). FOMC revised its own number to 3.6% in June.
Severity: High. Each quarter point the miss forces costs the household $125 a year on the HELOC and $15 on the card.
Owner: FOMC
Odds at filing: Sept 16 hike 52%. Zero cuts in 2026 93%. (Polymarket, 9/10)
Status: Open. The 2% version of this ticket has been open since 2021.I’ve closed tickets younger than the 2021 one.
Who pays: the same print, two bills
Friday’s number does two jobs, and for one house they point in opposite directions.
Job one is the hike. If the print lands at 3.5, the committee raises a quarter point on the 16th, prime moves to 7.00% that afternoon, the household’s $50,000 HELOC at prime plus one reprices on the next statement, and the card follows. That’s $125 a year on the HELOC and $15 on the card. The fixed mortgage doesn’t move.
Job two is the raise. Social Security’s cost-of-living adjustment for next year is the July, August, and September CPI-W average against the same three months a year earlier (SSA). Friday is one of the three inputs. A hot print lifts the January check for every retiree, including the parent this household is driving to appointments.
The household’s HELOC pays for a hot print. The parent’s January check collects on it.
Net net: the household wants a 3.3 on Friday and its parents want a 3.5, and the Fed’s own March forecast said neither number was on the table.
Headlines
- PPL Electric settled its Pennsylvania rate case: residential bills up 4.9% to about $184 a month, and data centers get their own tariff with ten-year minimum contracts (Utility Dive). About $9 a month for a household on that system, and the ten-year clause is the utility telling you who it expects to still be paying in 2036.
- Utilities requested more than $29 billion in rate increases in the first half of 2025, and residential electricity prices rose 11.5% that year (EESI). Utilities also fielded requests for more than 700 gigawatts of data center connections in 2025. The AI trade is on the delivery line of the bill before it’s on the stock page.
Corrected Sept 15: an earlier version of this item said $18.6 billion in the first half of 2026 and a 7.3% annual rise. Both figures and the year were wrong. The source says more than $29 billion in the first half of 2025 and 11.5% for 2025.
- Top 12-month CDs pay 4.50% to 5.00% this month while the national average 12-month CD pays 1.71% (Bankrate). The 2.8-point gap is the deposit desk’s margin on everyone who hasn’t looked since 2022.
- The Clarity Act, the crypto market-structure bill, went 16 to 14 to 16 on Polymarket inside 24 hours with $14 million on it. I’d read that as a thin book, since nothing happened on the Senate floor.
- Nowflation has a sealed call of 3.36% for Friday against the Street’s 3.4 (Nowflation). A forecast on the record before the print is the only kind this letter scores.
- Some Fed officials are still arguing for a hold (Axios). The hold case has one print left to make its argument.
The scorecard opens Friday. First entries: the crowd’s 3.4, the Street’s 3.4, Nowflation’s 3.36, and my line that 3.3 or 3.4 is a Friday. Print at 8:30, receipt at 8:31.