The Overnight RateMartin was chairman when he said it. Waller repeated the warning Thursday from İstanbul: inflation remains above target, another hike is coming, and Freddie just printed the consequences at 7.40%.
- A $300,000 30-year at 7.40% runs about $2,077 a month. Freddie printed that Thursday at noon, up from 7.28%, twelve basis points in one survey (Freddie Mac). Yesterday’s issue set the line at 7.35%. Freddie crossed it. The 15-year rose to 6.73% from 6.60%. A year ago the 30-year was 6.30%.
- Treasury sold $22 billion of 30-year bonds Thursday at 5.618%, the highest stop since August 2000, with bids covering 2.54 times and indirect bidders taking 72.3% (TreasuryDirect). Yesterday’s threshold was a stop above 5.70% or a bid-to-cover under 2.3. The auction cleared below both. The 10-year ended at 5.22%, down 6 basis points, and the 30-year at 5.60%, down 7 (Treasury). The S&P 500 fell 0.47% to 7,765.36, the Nasdaq lost 1.25%, and the Dow edged up 0.10% (S&P Dow Jones Indices, Nasdaq via FRED). Tech sold off; the old economy held.
- CBO’s monthly budget review, out Thursday, put the fiscal 2026 deficit at $2.0 trillion, up $218 billion from the prior year (CBO, reported by CRFB). Revenues rose 3% to $5.4 trillion. Outlays climbed 6% to $7.4 trillion. The fastest line: net interest on the debt, at $1.1 trillion, up $115 billion or 11%. That is more than defense. I’d note that every quarter point the Fed adds lands on the coupon the Treasury pays next.
Threshold: Wednesday
September CPI prints Wednesday, October 14, at 8:30 ET (BLS). August headline was 3.4% year over year. The Cleveland Fed nowcast has September at 3.6%, with most of the monthly gain in energy (Cleveland Fed). Core is 2.4%. News is headline above 3.7% or below 3.4%.
Who pays: the gallon, the kilowatt, and the shelf
Regular gas is $4.37 this morning, $1.26 above a year ago. Diesel is $6.28, up $2.60 (AAA). Residential electricity averaged 18.31 cents per kilowatt-hour in July, up from 17.45 cents a year earlier (EIA). Freddie’s 30-year is 7.40%, from 6.30% a year ago (Freddie Mac).
The mechanism: diesel moves nearly everything on a shelf, and a 70% annual increase in the gallon lands on the carrier, then the wholesaler, then the receipt. Electricity covers the house and, increasingly, the data centers bidding for grid capacity. None of these costs waited for the September hike.
Payer: the household at the pump, the meter, and the register. Payee: the refiner, the utility, and every carrier between the port and the store.
Net net: Gas up $1.26, diesel up $2.60 over the year, Freddie at 7.40%, electricity at 18 cents, and wages grew 3.0% (BLS). The bills are outrunning the check.
Headlines
- Governor Waller, speaking in İstanbul Thursday, called inflation “problematically elevated” and said hikes don’t need to come at consecutive meetings (Fed). He’s got a case: core PCE hasn’t been at 2% in more than two years. I read that as December, not October.
- October hike 18% on Kalshi, December 73% (Kalshi). Polymarket’s hike count: one 23%, two 71%, three 8% (Polymarket). December crept up 3 points since yesterday.
- Iran-Oman Hormuz deal by Oct. 31: 19% on Polymarket, from 20% (Polymarket). Diesel at $6.28 still carries the premium at the pump (AAA).
CPI Wednesday. The Cleveland Fed has it at 3.6%.