September 11, 2026
Inflation data took center stage this week ahead of next Wednesday’s Federal Open Market Committee (FOMC) and interest rate decision. Bond yields rose sharply, driven by higher oil prices amid escalating tensions in the Middle East, and investor disappointment following the U.S. Treasury’s recently announced increase in purchases of longer-dated government securities.
Turning to the economic data, producer prices rose 5.4% year-over-year in August, up from a revised 4.8% in July. Excluding the more volatile components, the core measure gained 4.6%, compared with a revised 4.3% the prior month. Consumer prices in August rose by 3.4% year-over-year, while the core index eased slightly to 2.4% from 2.5% in July. Elevated producer prices continue to place upward pressure on consumers and test the Federal Reserve’s inflation-fighting resolve.
Higher oil prices, stubborn inflation above the Federal Reserve’s 2% target, and elevated government and corporate bond issuance continue to push yields higher. At the time of writing, the 2-year U.S. Treasury yield rose approximately 25 basis points, or 0.25%, on the week to 4.60%, while the 10-year note rose approximately 15 basis points to 4.95%. The S&P 500 declined approximately 0.6% to 7,672, while West Texas Intermediate crude oil traded near $99/barrel having topped $103/barrel on Thursday for the first time since May. Gold eased to approximately $4,383 per ounce.
Next week’s FOMC decision remains a close call, with markets assigning a relatively high probability to a 0.25% rate increase from the current 3.50%–3.75% target range. In addition to the rate decision, investors will closely examine the committee’s Summary of Economic Projections for insight into the future path of interest rates. Despite higher bond yields our client portfolios remain resilient, supported by an emphasis on strong credit quality, ample liquidity, and disciplined duration management.
Lastly, on this twenty-fifth anniversary of the 9/11 terrorist attacks, we remember those who tragically lost their lives and the families left behind; the heroic bravery of our first responders, the solidarity that emerged in the aftermath, and the enduring resilience of the American people in the face of adversity.
Next Week: FOMC rate decision and Summary of Economic Projections, Retail Sales, Industrial Production, and Housing Starts and Building Permits.
Written by Daniel Delaney, CFA, Deputy Chief Investment Officer