The Overnight RateThree moves
Fed and rates. Cleveland Fed President Beth Hammack said Monday that “a restrictive monetary policy stance is appropriate to ensure a timely return to 2 percent inflation,” and that she’d rather make “smaller adjustments, and to do so relatively quickly” than wait for a bigger correction (Cleveland Fed). Since Monday’s issue, Kalshi’s December hike odds rose to 75% from 70%, and October is 17% (Kalshi). A hike reaches card rates and other prime-linked loans within a statement cycle. The other side: she also called financial conditions neutral, and one president isn’t the committee. I’d read the odds as the market believing her about December more than October.
Policy. Treasury’s sanctions office issued General License 135 on Friday, authorizing the sale and importation of Russian-origin diesel, including into the US, through April 7, 2027 (OFAC). President Trump said Russia would supply more than 300,000 metric tons right away, about 2.25 million barrels, and ICE gasoil futures fell 2.3% Monday (Reuters via Star-Advertiser). PVM’s Tamas Varga told Reuters the export Moscow freed is roughly one day of US use. Diesel feeds freight, so it shows up in shelf prices. The counterpoint is legal: seven senators from both parties said the deal “runs directly counter” to a law banning Russian energy imports (BBC). My read: it’s a license and a promise until cargoes land.
Corporate money. Kroger plans to cut about 3,000 corporate jobs over three years, CEO Greg Foran wrote in a memo shared with Grocery Dive, citing “more layers, more handoffs and more overhead than we need” (Grocery Dive). He tied the savings to lower prices and frontline pay as Walmart, Costco and Aldi gain share. The memo names no timeline or departments. For shoppers, any payoff shows up slowly at the register. The counterpoint: Kroger promised price cuts in May, and Walmart answered that day with cuts on more than 7,000 items. I’d want to see Kroger’s shelf prices move first; until then I’d file this under margins.
What could move prices
The Houthis claimed a Saturday strike on Riyadh’s international airport that killed 13 and wounded more than 300, and Brent settled Monday at $106.65, its highest since Sept. 15 (Reuters via Star-Advertiser). Goldman put the risk premium at just over $20 a barrel. The mechanism is Saudi export plumbing: an analyst wrote that five Saudi refineries briefly shut when a Red Sea pipeline closed after missile attacks. Jet fuel and pump prices carry the risk. My read: a confirmed hit on a Saudi terminal is the trigger that would push that premium higher.
The calendar
September CPI prints Wednesday at 8:30 ET (BLS). August ran 3.4% from a year earlier, and the Cleveland Fed’s September nowcast is 3.60% headline, 2.39% core (Cleveland Fed). I’d call 3.8% or higher news that backs Hammack’s December case, and 3.4% or lower news that undercuts it.
Who pays: the home seller
Redfin says 14.5% of September home purchase deals fell through, the highest share in its records, as pending sales dropped 4% in a month to their lowest since spring 2014 outside April 2020 (Redfin). Supply hit its highest since March 2020, and 60.5% of homes sold below original list. The mechanism, once: a buyer walks during the inspection or financing window, the house relists with more days on the clock, and the next offer starts lower. Payer: the seller, through price cuts and closing-cost credits. Payee: the buyer who stays in and gets to bargain.
Net net: the median sale price still rose 1.3% to $393,895, so sellers are giving back gains through concessions before the headline price shows it.
Also moving
- Prices and commodities: MMA/BSEE’s Monday survey had 29.63% of Gulf of America oil output shut in, down from 57.54% Sunday, with 5 platforms still evacuated (BSEE); the restart ran faster than I guessed Monday.
- Stocks and earnings: Wells Fargo reports at about 7:00 ET, Citi about 8:00, and JPMorgan’s call is at 8:30 (Wells Fargo, Citi, JPMorgan); card losses and deposit costs are the household read.
- AI and data centers: Hammack said AI-buildout demand is raising prices on computer and electronic components, costs that spill into power plants and construction (Cleveland Fed).