The Overnight RateThree moves
Prices and commodities. Import prices rose 1.1% in September after 0.5% in August, and 8.1% from a year earlier, the largest 12-month gain since July 2022 (BLS). Fuel led, up 4.8% on the month, but nonfuel imports rose 0.7% and haven’t fallen in a month since August 2025, with capital and consumer goods both higher. Friday’s issue said a sharp monthly rise would mean the energy pass-through was still traveling, and 1.1% clears that bar. Importers pay at the dock, then pass it to shelves. The counterpoint: imported food, feeds and beverages were flat on the month. Our read: the price chain has moved past oil.
Policy. A presidential order dated Oct. 16 raised duties under the new Graham Act, 500% on Russian goods and 100% on goods from the five largest buyers of Russian crude and natural gas that buy on or after Oct. 18, then waived all of them in the same document (White House). The Trade Representative now monitors purchases and reports back. Brent was down 2.38% at $107.25 as of 4:52 a.m. ET Monday on the prospect of more Russian supply, CNBC reported (CNBC). A 100% duty on a big trading partner would have reached US shelves fast. The counterpoint: the waivers hold only until officials decide “further action is appropriate.” Our read: the tariff risk is now one memo away.
Bonds and Treasuries. Japan held $1,068.3 billion of Treasuries at the end of August, down $35.6 billion in a month and $171.0 billion since February (Treasury TIC). Mainland China slipped to $590.7 billion from $618.0 billion. Foreign official accounts, mostly central banks, held $3,755.6 billion, down from $4,009.6 billion in February. When steady buyers step back, private investors set the price and ask for more yield, which feeds loan rates. The counterpoint: total foreign holdings rose to $9,331.7 billion as the UK and Canada added, and the table tracks custody, which isn’t always ownership. Our read: the buyer who never haggled is shrinking.
What could move prices
Iran’s Revolutionary Guard navy said two supertankers hit naval mines in the Strait of Hormuz on Saturday, Reuters reported (Reuters via Reporter World News). UKMTO also reported two tanker attacks near Al Jubail, Saudi Arabia (CNBC). Mines raise war-risk insurance and freight on Gulf cargoes, which reaches trucking and jet fuel quickly. Polymarket US has Hormuz traffic back to normal by Dec. 31 at 8%. Our read: oil fell anyway, so independent confirmation of the mines is the trigger.
The calendar
Census releases September housing starts at 8:30 ET Tuesday (Census). Builders started homes at a 1,275,000 annual pace in August, 1.2% below a year earlier (Census). We’d call a pace above 1,350,000 news that builders still see buyers, and one below 1,200,000 news that they’re pulling back. The Fed meets Oct. 27 and 28.
Who pays: Microsoft, for its Indiana power
NiSource says Microsoft will fully fund generation and transmission for its Indiana campus under a 20-year power deal from 2028 (NiSource). The mechanism, once: a separate generation company serves big data-center loads, so plant and wire costs sit on the tech company’s contract and value from its use of the existing grid flows back to regular customers. NiSource expects NIPSCO customers to save about $1.75 billion across its data-center contracts, up to $140 per customer a year. Payer: Microsoft. Payee: the NIPSCO household. The counterpoint: Minnesota’s attorney general says Xcel’s Google deal could leave other ratepayers closer to $1 billion in net costs (Minnesota AG).
Net net: the contract decides whether a data center cuts the neighbors’ bills or raises them.
Also moving
- Fed and rates: The New York Fed plans about $14.6 billion of bill purchases through Nov. 13, all reinvestment and no reserve-management buying (NY Fed); no new money.
- Corporate money: Anthropic offered Blackstone a 10% coupon on $9 billion of chip-lease debt, the FT reported via Mint; AI borrowing costs more.
- Chips and supply: Helium spot prices have tripled since the war began, an industry veteran told 60 Minutes; chipmakers on allocation pay first.