Three Things to Watch
- The focus this week will be on the U.S. Federal Reserve (Fed) decision Wednesday afternoon. Fed funds futures imply an 88% probability of an interest rate increase at this meeting and three to four over the ensuing 12 months. This would be the Fed’s first interest rate increase this cycle and with the move widely expected, all eyes will be on the statement and Fed Chair Kevin Warsh’s press conference.
- Traders will also get a fresh look at consumer activity with retail sales out Wednesday morning (the morning of the Fed announcement). Overall retail sales are expected up 0.8% and ex-autos and gas stations, up 0.4%. Those would represent a sharp improvement from the previous month.
- Global bond markets will remain in the spotlight. The 10-year Treasury is flirting with 5% for the first time since 2006. The 10-year note hit 4.99% in the fall of 2023 in the last sell-off and has been under pressure this year on a combination of inflation and deficit concerns, as well as competition for capital from the private sector borrowing binge related to artificial intelligence capital expenditures. So far stocks have held up well but 5% represents an important psychological level.
Three Things to Know
- U.S. headline Consumer Price Index has been above 2% for 66 consecutive months. (Source: Haver Analytics)
- U.S. household net worth surged $12.5 trillion in the second quarter of 2026, to a record $185.7 trillion. This also marks the largest quarterly increase on record. U.S. household net worth has now risen for 11 consecutive quarters, by a total of $43.4 trillion. Since the 2020 pandemic, this figure has surged $83.9 trillion. As a percentage of gross domestic product, household net worth rose 20 percentage points last quarter, to 571%, just below the all-time high of 574% set in the third quarter of 2021. (Source: The Kobeissi Letter)
- U.S. diesel prices officially rose to a record $6.20/gallon, now up 78% over the last nine months. This has pushed diesel prices in California to a record $8.14/gallon, with some areas seeing prices approach $9/gallon. The surge in prices comes as the United States is officially in peak-diesel demand season with supply at historically low levels. (Source: The Kobeissi Letter)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.
5921596 – EXP: 09/30/2029