Oil above 100 and borrowing costs near 5% as the Fed meets Wednesday

S&P 500 closed Friday at 7,657. Looks fine. But the 10-year Treasury yield, the interest rate the government pays to borrow for a decade, ended at 4.975%. That climbed nearly 2 tenths of a percentage point in 5 days.

Brent crude settled at $104.61. Core monthly inflation printed 0.3% when economists expected 0.2%. Consumer confidence dropped to 47.8 against a forecast of 51. Wages grew 3.1%. Prices grew 3.4%. You lost ground.

The Fed meets in 4 days. Traders put the odds of a rate hike at 89%.

The S&P 500 gained 0.86% on Friday. The Dow rose about 509 points. So you had a good day, right?

Depends where you look. A handful of mega-cap tech names did all the work. Small companies lagged badly. If you own a broad index fund you might think everything rallied, but really 7 stocks dragged the rest of the market along with them, and that kind of rally has a habit of looking great right up until it doesn't.

Bond traders ended Friday pricing in 2 full rate hikes by year-end. At Monday's close they were pricing about 1.35. So if you've got a mortgage renewal coming up, or you're thinking about refinancing anything, the number you'll be quoted just changed.

Saudi Arabia shut its East-West Pipeline after multiple aerial attacks. The line runs 750 miles, from the eastern oil fields all the way across the kingdom to the Red Sea port of Yanbu, and its entire purpose is to get crude out without passing through the Strait of Hormuz. Now it's offline. And the Strait is the narrow waterway Iran can threaten.

Trump said Saturday Iran was "probably responsible." He also said oil prices will fall sharply after November's midterms. You've heard that kind of thing before.

Diesel hit a record $5.85 a gallon earlier this month. Winter is 10 weeks away. If you heat your home with oil, that's your number.

Brent did dip on Friday, down from $107.63 to $104.61, after Gulf states opened a door to talks with Iran. But no talks have actually started. So does the pipeline reopen, or does someone just keep promising it will?

89% chance of a quarter-point rise on Wednesday. That's the rate that feeds into your mortgage, your car loan, your credit card.

A week ago odds sat at 62%. Two weeks before that most of Wall Street thought it wouldn't happen this year at all. Then oil crossed $100. August payrolls came in at 162,000. Triple what forecasters expected. And Friday's core inflation number sealed it.

But the hike itself is priced. What you don't know, what nobody knows, is whether Chairman Kevin Warsh signals a second one. He has refused to say anything about the path beyond Wednesday, and bond traders are already betting on 2 hikes by year-end. So if you carry variable-rate debt, don't listen for the decision. Listen for the sentence after it.

Consumer prices rose 3.4% over the past year. Wages rose 3.1%. That gap sounds tiny.

It isn't. Every raise you got this year has already been eaten at the till. And month-on-month inflation jumped to 0.4% in August, up from 0.1% in July. The direction is getting worse. Consumer confidence sank to 47.8, near historic lows, and you can see why, because if your grocery bill climbs every week and your pay packet stays flat, you don't need a survey to tell you how you feel about the economy.

Can a rate hike fix that? Not directly. Higher rates can cool prices. They can also cool hiring. If your employer freezes raises while prices stay sticky, you lose twice.

JPMorgan stopped lending to Situational Awareness, a hedge fund run by former OpenAI researcher Leopold Aschenbrenner, after large losses on AI trades. JPMorgan was the fund's prime broker, the bank that lends a hedge fund the cash and shares it needs to trade.

Banks don't end that relationship over a rough quarter. They end it when losses start threatening the collateral backing the loans. That tells you something about the size of the hole.

Now every major AI stock has been through a drop of 20% or more at some point in 2026. The S&P 500 near a record hid all of that. Was Aschenbrenner just early? Or is he the first name you're hearing, not the last?

Gold spot sits at $4,332.96, down from Friday's close of $4,348.36. Still 19.5% below its 6-month high of $5,405 from January. A rate hike should make gold less attractive. Bonds pay you interest. Gold pays you nothing. But gold gained even as rate expectations climbed last week, which tells you fear is doing more work than arithmetic right now.

Silver spot is $63.74, off from $64.48. It takes 67.4 ounces of silver to buy 1 ounce of gold today. 3 months ago it took 62. Why is silver losing ground all summer?

Copper spot is $6.53 a pound. It hit $6.85 on 9 September and then dropped.

Wednesday is the day. The Fed announces its rate decision and that 89% hike probability is already priced. What you want to hear is whether Warsh opens the door to a second move, because if he does, your borrowing costs into 2027 shift. And watch Saudi Arabia's East-West Pipeline. Every day it stays shut, oil stays above $100, and that feeds straight into the inflation number the Fed is trying to bring down.

Issue compiled from the Sunday, 13 September 2026 desk notes. Page published Saturday, 26 September 2026. Metal prices are spot at the time of writing. Figures come from the sources set out in the editorial standards. Corrections: [email protected].

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