Wednesday, September 9, 2026 |
|
The Last Page.
The last page, first.
|
|
Can the Fed Hike Into a $100 Barrel?
Brent is a dollar short of a hundred after American strikes near Iran’s main export terminal. Friday’s inflation report covers August, and the Fed votes next Wednesday.
|
|
The story
Brent crude is within a dollar of $100 this morning, a level it last touched in late July. The barrel is up more than 60 percent this year.
Central Command says American forces destroyed five Iranian tankers loaded with crude near Kharg Island. The strikes answered an attempt to hit a Navy warship with ballistic missiles.
Kharg sits fifteen miles off the Iranian mainland and loads about 90 percent of the country’s crude exports. The terminal itself is still working this morning.
Iran’s Revolutionary Guard told tanker crews across the Gulf to abandon their ships, at anchor or docked, because they will be targeted. Houthi forces hit energy sites in southern Saudi Arabia and shut several of them down.
When oil first went to war in March, two arguments got made about what it does to your money. Jim Bullard, the former St. Louis Fed president, said America pumps enough of its own crude that headline prices rise while core inflation holds.
Luke Tilley at Wilmington Trust put a figure on the other view. Crude at $100 for three months, by his estimate, risks a recession.
The August inflation report lands Friday morning. The Fed votes next Wednesday. And the clock Tilley described started this week.
|
|
$99.59
Brent this morning, up more than 60 percent this year.
|
90 percent
The share of Iran’s crude exports that loads at Kharg Island.
|
60 percent
The odds swaps put on a rate hike next Wednesday, war or no war.
|
|
|
Core inflation
|
The inflation measure that leaves out food and fuel, on the theory that both jump around too much to steer by. It is the number the Fed leans on hardest. So a war at the pump can stay invisible in the figure that moves your mortgage.
|
|
|
Best case
OCTOBER 2026. Bullard’s version held up. Kharg kept loading through the fall, and the Guard’s warning to the tanker crews stayed words. The premium bled away the way it did in July.
Headline inflation popped for one month and came back down. Core barely moved, so the September hike reads as a single move made to settle an argument about credibility.
Your fuel bill peaked in September and eased into the holidays. The furnace burned oil bought before the spike. Dull again, at a higher level than last year.
Seven months of war have trained this market to price a bad week and then forget it.
|
|
Worst case
|
DECEMBER 2026. Tilley’s three months ran their course. Crude held near a hundred from September, and Kharg loaded on and off all autumn. Houthi strikes kept Saudi capacity down in stretches.
Diesel led, and then everything that moves on diesel followed. The freight surcharge on your grocery order stopped being described as temporary.
The Fed had raised in September, into an economy the fuel bill was already slowing. By December the argument inside the building was about how much damage the hike added to the damage the barrel did.
Your bond fund and your heating bill moved the same way at the same time. That combination is what turns a retirement plan into a guess.
|
|
|
How it ends
You get the hike next Wednesday and the fuel bill after it, unless Kharg Island stops loading.
Friday’s report measures August. The war moved in September, so that number is a photograph of a month which ended before the strikes.
Economists surveyed by Bloomberg look for 3.4 percent on the headline and 2.4 percent on core. Swaps have the hike at about 60 percent. Warsh spent August telling anyone listening that inflation is the problem he intends to solve.
J.P. Morgan’s Phil Camporeale made the sturdier case back in August. After July’s hold, a quarter point restores the Fed’s credibility with a market that had started to doubt it. So the decision arrives before the evidence does.
Then the sequence that actually reaches you. This week’s energy shows up in October’s data, and in your own bills weeks before that. The Fed will have already voted. And the measure it leans on hardest keeps fuel out of the arithmetic.
Seven months of this war have paid everyone who narrates it, whichever week they happened to be right about.
The vote next Wednesday is the easy part.
|
|
|
The hinge is Kharg Island. About 90 percent of Iran’s crude leaves through that one terminal, and this week’s strikes took tankers around it. If the loadings stop, the market is short real barrels, and the price has further to travel.
|
|
|
One story a day, carried through to its ending. If that is more finishing than you want with your coffee, the door below works.
|
|
The Last Page.
The last page, first. Reply and name the story you want finished.
|