Two weeks ago, the probability that the Federal Reserve was going to raise short-term interest rates was hovering around 60%, but with a string of inflation data coming in hotter than expected (above estimates), the odds increased to over 90%.CPI inflation report August 2026: On Wednesday afternoon, the Fed did indeed raise rates, signaling the fight was far from over. The next question: how many more will we see in the coming months? One of the caveats – the duration of the Iran war. We are now 6-months into the conflict with what seems to be no clear end in sight. Comparing prices now to when the initial strikes began on February 28th, let’s look at how oil, inflation data and interest rates have changed:
- Crude Oil (as measured by West Texas Intermediate): $103/barrel vs. $67/barrel
- Inflation (as measured by headline PCE): 3.7% year-over-year vs. 2.8% year-over-year
- Interest rates (as measured by the 10-year Treasury): 4.97% vs. 3.96%
Regardless of whether you support what is going on in the Middle East, with the average price at the pump around $4.25/gallon, coupled with diesel prices at record levels north of $6/gallon, the notion that one quarter point rate increase would move inflation closer to the elusive 2% target is not likely. The Federal Reserve can’t control what is going on in the Middle East, and the power for them to rein in supply driven inflation (which is what’s occurring) is usually not effective. Maybe elevated prices for a month or two leading into the mid-term elections is what will be needed for more resolute actions in the Middle East. Below is a chart of the 10-year Treasury yield since the end of February:
10-Year Treasury Briefly Crosses 5% - What History Tells Us
Many have probably seen the headlines regarding the 10-year Treasury reaching 5%, and that somehow reaching this level and sustaining it, foreshadows a sharp economic decline and doom and gloom for the stock market. As is frequently the case, there is more to the story. A few things to keep in mind are the reasons for the increase in yields, the pace in which we get there and the broader economic backdrop. 10-year yields are driven by both inflation expectations AND economic growth. They are not mutually exclusive. While the Atlanta Fed GDPNow numbers are volatile, the latest readings predict economic growth in the 3rd quarter to be close to 5%. One of my favorite quotes (attributed to many different people): “It is difficult to make predictions, especially about the future.” GDPNow - Federal Reserve Bank of Atlanta
Financial Planning Corner
Social security gets a lot of attention in our world, and rightfully so, as most Americans rely on this source of income for approximately 1/3 of their monthly income needs during retirement. One rule that often gets overlooked is the ability to receive six-month’s worth of retroactive benefits once you reach Full Retirement Age (FRA) or beyond. While most Americans who wait until their FRA or later to claim social security aren’t in a liquidity crunch and feel strongly about the monetary decision to maximize benefits by waiting to claim at age 70, things can always change. As advisors, it’s our job to make you aware of the options available to you. Here’s how it would work: if you have reached your FRA (or beyond), say 67 1/2, something has changed in your life where the ability to claim retroactive benefits is advantageous, you can apply for a lump-sum payment for six months' worth of benefit as if you had claimed at 67. When you apply for the lump-sum benefit, that then triggers your permanent monthly benefit. The one thing to be mindful of is your permanent monthly benefit goes back to what it would have been had you claimed six-month’s prior. Six-Month Reversible Delays Of Social Security Benefits
NYC on 09/11/26
I traveled to Atlanta Friday night for a quick trip to watch Tennessee play Georgia Tech Saturday 😊. My layover happened to be at LaGuardia as the sun was setting on 09/11. As my plane flew over lower Manhattan, we had a stunning view of One World Trade where the Twin Towers once stood. I wanted to share a couple photos that I took as we were descending.
While I didn’t personally know anyone who lost their lives in the 9/11 attacks, the emotions I had passing over where such evil transpired 25 years earlier were powerful, and frankly, brought me to tears. However, it was also a beautiful reminder of the resilience of the American people, and the determination to not let evil triumph.
Quick Hits:
- New restaurant review: It’s been over 2 years since I moved to Maine, but had yet to try a popular Japanese restaurant until last week – Yosaku – highly recommend: Yosaku Japanese Restaurant, Portland Maine | Premium Sushi Bar
- I’m thinking a visit to Acadia National Park is on the horizon: 8 Special Features of Acadia - Visit Maine - Visit Maine
- Latest fall foliage map and forecasts: Fall Foliage Map 2026: Daily Updates and Forecasts!
- Book Recommendations: I just started Theo of Golden by Allan Levi. Everything I have heard about the book from friends and family sparked my interest, and I’m only 100 pages through, it is transformative. Theo of Golden - Wikipedia
Quote: "Follow effective action with quiet reflection. From the quiet reflection will come even more effective action." – Peter Drucker
