The Overnight RateMartin’s chaperone took the overnight punch bowl on Sept. 17. The long end of the bond market stayed at the party through the whole of September anyway.
- Wednesday’s issue said core PCE at 0.4% or more, or 0.1% or less, would be news. It printed 0.2% on the month and 3.0% from a year earlier, down from July’s 3.3% after BEA’s annual revision of the series. Headline was 0.3% and 3.4% (BEA). Inside our band, and the market moved anyway: an October hike is 34% on Kalshi this morning, from 42% in Wednesday’s issue, and December is 72% (Kalshi). I’d score our line as too wide. After Tuesday’s seven-point drop in consumer confidence, a plain 0.2 was enough to move October.
- The 10-year Treasury closed September at 5.29%, from 4.79% on Sept. 1. The 2-year went from 4.39% to 4.88% over the same month, and the 30-year from 5.27% to 5.64% (Treasury). Mortgage News Daily’s average 30-year quote ended Wednesday at 7.60%, another long-term high (Mortgage News Daily). Freddie Mac’s weekly average went from 6.71% in the first September survey to 7.03% in the last (Freddie Mac).
- The S&P 500 closed September at 7,651.54, down 0.25% Wednesday and 0.45% for the month, still up 2.0% for the quarter (Yahoo Finance). BEA’s third estimate lifted second-quarter GDP to a 2.2% annual rate from 1.5%, and trimmed the corporate-profit gain to $384.0 billion from $400.9 billion (BEA).
Threshold: noon today, 8:30 Friday
Freddie Mac’s weekly 30-year average prints at noon from 7.03% as of Sept. 24 (Freddie Mac). A weekly print at 7.25% or higher this year is 87% on Polymarket, from 79% Wednesday (Polymarket). News either way is a clear step to 7.25% or higher, or a print that stalls under 7.10% while the daily quote sits at 7.60%.
BLS publishes September payrolls Friday at 8:30 ET (BLS schedule). August added 162,000 jobs with unemployment at 4.1% (BLS). Trading Economics has the September consensus at 90,000 (Trading Economics). I’d call under 50,000, or 150,000 and up, news for the October path. In between probably leaves December as the meeting that still carries the hike.
Who pays: the fuel line, in the basket
What things cost this morning: regular gas $4.41 and diesel $6.39 (AAA). Freddie Mac’s 30-year 7.03% (Freddie Mac). Residential electricity 18.31 cents a kilowatt-hour in July (EIA Table 5.3). Prime 7.00% (Bank of America).
The line that moved most in a month is diesel: up 76 cents a gallon in a month, from $5.63, and $2.68 above a year ago. Regular is up 32 cents in the month and $1.25 in the year (AAA). An Iran-Oman agreement on Hormuz shipping by Sept. 30 expired without resolving yes. The Oct. 31 contract is 18% on Polymarket this morning, from 23% Wednesday (Polymarket).
The mechanism, once: diesel moves the freight, so a higher gallon lands on carriers first, then in the landed cost of what they haul. Payer: the fleet buying gallons every week, and the household behind it at the register. Payee: the refiners and distributors collecting today’s pump price. I’d argue a shipping contract dying at a few percent cleared nothing out of the gallon; the Oct. 31 contract losing five points this week says the crowd agrees.
Net net: the overnight rate moved once in September. Diesel moved 76 cents, and it reaches a grocery receipt faster than a Fed meeting does.
Headlines
- Households earned 0.2% more in August and spent 0.9% more, with the saving rate at 4.1% (BEA). The difference came out of savings, which is where the spending the Fed calls resilient is coming from right now.
- Junk-rated companies paid about 8.08% to borrow Tuesday, from 8.03% Monday and 7.46% a week earlier (FRED). Their spread over Treasuries was 3.08 points Tuesday (FRED). Investment-grade yields held near 5.97% (FRED). The weak borrower keeps paying for doubt.
- Polymarket’s 2026 hike count includes Sept. 17: one 18%, two 60%, three 21%, four 2%. That is about 82% for at least one more hike this year, and about 23% for two more on top of September (Polymarket).
Freddie at noon. Payrolls at 8:30 Friday.