Dear Reader,
Markets open tomorrow morning, and this is the most consequential week of the year for your money.
Let me tell you what's actually on the calendar, and then tell you the one thing about it that almost nobody is saying out loud.
Wednesday at 2:00 PM, the Federal Reserve announces what it's doing with interest rates.
Thursday, the Bank of England. Friday, the Bank of Japan.
Three central banks in three days.
But Wednesday is the one that matters to you.
What Changed on Friday
Friday morning, the Bureau of Labor Statistics reported that consumer prices rose 0.4% in August, and 3.4% over the past twelve months.
Those matched what Wall Street expected.
The part that didn't match was core inflation — the measure that strips out food and energy. It rose 0.3% for the month, a tenth of a point hotter than the consensus.
One tenth of one percent. And it moved the odds of a rate hike this Wednesday from roughly seven in ten to nearly nine in ten.
So understand where we are. The Federal Reserve has not moved interest rates once in 2026. Not one time, all year.
And the market now expects them to raise on Wednesday.
It would be the first increase under Kevin Warsh, who took over as chairman in May after Jerome Powell.
A new chairman's first move is never really about a quarter of a point. It's about telling you who he is.
Watch the Dot Plot, Not the Hike
Here's what I'll actually be looking at Wednesday afternoon, and I'd encourage you to do the same.
It isn't the rate decision. By Wednesday the market will have that mostly priced in.
It's the dot plot.
Four times a year the Fed publishes its economic projections along with a chart showing where each individual member thinks rates are headed. September is one of those meetings.
A quarter-point hike with a dot plot that says "that's it, we're done" is one world.
A quarter-point hike with a dot plot pointing to more increases through year-end is a completely different one — particularly with the ten-year Treasury yield already sitting up near 5%.
Same hike. Two entirely different outcomes for anybody who owns stocks or bonds.
That chart comes out at 2:00 PM Wednesday, at the same moment as the decision. Most of the coverage will lead with the rate. Read the chart.
The Thing Nobody Is Saying
Now here's the part that has been bothering me all week.
Look at why inflation is running hot again.
This week, oil punched back above $100 a barrel for the first time since the spring, after Iran's Revolutionary Guard struck an unmanned American vessel in the Strait of Hormuz — the channel roughly a fifth of the world's seaborne oil has to pass through.
Diesel hit an all-time high.
That is not an economy running too hot. That is a supply problem.
And the Federal Reserve has exactly one tool. It makes money more expensive, which slows down demand.
That tool works beautifully on an economy overheating from too much spending.
It does absolutely nothing about a tanker that can't get through a strait.
Raising interest rates has never produced a single additional barrel of oil. Not once, in the entire history of the institution.
So the Fed is going to tighten into an energy shock, because tightening is the only thing it knows how to do. Borrowing gets more expensive for you and your business, and the thing actually driving your bills — the cost of moving energy around the planet — doesn't budge.
I want to be honest: I don't think they have a better option. That's what makes it uncomfortable rather than outrageous.
But if you follow that logic to the end, it tells you something about where to look.
The only real cure for an energy shortage is more energy. Not a rate decision. Production.
Which is why the story I've been spending my own time on lately has nothing to do with Washington.
A Valley in Utah
There's a drilling crew in a valley in Utah that just cracked a fuel source the oil industry spent fifty years trying and failing to reach.
Not a new well in an old field. A different kind of energy entirely — one that doesn't care what OPEC decides, doesn't care what happens in Hormuz, and can't be blockaded by anybody.
Google has signed a check. So has Berkshire Hathaway. So has the Pentagon.
It's the Department of Energy's most ambitious drilling initiative since the program that kicked off the shale revolution — and shale, you'll remember, rewrote the entire global energy map in about a decade.
One company sits at the center of it.
The whole thing goes public on October 20th.
That gives you about five weeks, and it lands squarely in the middle of the mess I just described to you.
I've put together a briefing explaining what they found, why fifty years of drilling couldn't reach it, and the company at the center.
The Bottom Line
Wednesday at 2:00 PM the Fed tells us what it intends to do. Read the dot plot, not the headline.
But keep the larger thing in mind. We are about to watch a central bank fight an energy shock with an interest rate, which is a little like fighting a drought with a thermostat.
The fix for this one doesn't come out of Washington. It comes out of the ground.
And if you want to see exactly where it's coming out of the ground — and the one company doing the drilling — I'd get through this before October 20th.
Markets open tomorrow. I'll see you then.
Enjoy the rest of your weekend.
"The Buck Stops Here,"
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Written by Dylan Jovine