The past week was one of the most joyous – and scary – of my life. (a 🧵) I gave birth to my daughter and my heart grew several sizes. Then the “silent killer” after childbirth hit me and I nearly died.

7.37% mortgage rates

Yikes. The 10-year bond yield climbed above 5.2% today for the first time since summer 2007. Wall Street may think this is ok, but it's jarring for Main Street. This is painful for many Americans. 1) Mortgage rates are back above 7% 2) Auto loan rates are rising swiftly now too 3) Personal loans have been a lifeline for many moderate-income Americans, but those rates are also climbing 4) Refinancing is dead. Any household or small biz hoping to refi a loan is struggling 5) Many banks are sitting on bonds that yield under 5%, so they're having to hedge their holdings (to avoid selling at losses) There's a lot of pressure building on the economy from higher borrowing costs.

Translation: Wall Street is more and more worried about inflation (even after the rate hike today)

Fed Chair Kevin Warsh says 3 things changed that led to the rate hike today: 1) Strength of the economy. "The economy has strenghtened. It’s a judgement I have and the committee has." 2) Inflation summer trends weren’t passing his test for moving toward 2% "clearly and at sufficient speed" 3) Geopolitics (aka war in Iran and oil/diesel). Warsh says "Our judgement about what is the most likely or least likely geopolitical situation has changed"

Fed Chair Kevin Warsh: "Inflation risks are to the upside, while labor risks are roughly balanced." He doesn't like to give forward guidance, but he's telegraphing it's probably going to take more than 1 hike...

The big news today is the Fed is signaling a "mid-cycle adjustment" of 2 or 3 rate hikes. They are trying to act early and decisively to ensure they don't have to hike much to get inflation under control. Look at the latest forecasts from Fed leaders: 1 more rate hike predicted in 2026 In 2027, 8 leaders anticipate another hike, 6 anticipate rates the same and 4 anticipate a cut. But...Inflation not projected to return to the 2% target until 2029

JUST IN: The Federal Reserve did it. The Fed hiked interest rates a quarter point to 3.75 to 4%. This is the highest interest rate since late 2025. The vote was unanimous (12 to 0) The statement says: “Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability.” ***Big news = The “Dot Plot” forecasts 1 more hike this year and then a lot of uncertainty for 2027 (most anticipating rates the same or lower next year).

Central bank watchers now overwhelmingly expect not only a Fed rate increase this week, but a second hike before the end of the year

"We haven't seen this type of income squeeze since 2012" Important point from economist @GregDaco on how significant this pain is for many American households.

A September Fed rate hike is almost locked in now 85% chance the Fed hikes next week. It's the right call. The risks are growing that inflation remains entrenched (or keeps broadening). Fed Chair Warsh doesn't want to make the same mistake Powell did of waiting too long to hike. My focus is on middle and lower-income Americans. I believe a rate hike might *help* them a) by containing inflation and b) by potentially LOWERING borrowing costs as bond investors have more confidence the Fed is on the case.

You can see the war in Iran impact right here... The problem for the Federal Reserve -- and American households -- is the inflation problem is starting to be more widespread than just an energy shock. Gas: 27% rise in past year Airfare: 23% Energy: 16% Hospital services: 5.2% Car repair: 5.2% Electricity: 3.8% Clothing: 3.6% Restaurants: 3.4% Services (excluding energy): 3% Shelter (mainly rent): 3%

Americans are getting financially squeezed. Inflation has wiped out wage gains since April. Wage growth in the past year: 3.1% Inflation in the past year: 3.4% Many American households have to belt tighten and make difficult choices on what to cut back on. This is why consumption appears to be slowing (and will likely cool more, especially for middle-class brands).

JUST IN: America still has an inflation problem. CPI inflation was 3.4% (y/y) in August. Core inflation came in at 2.4%. The big news is inflation rose 0.4% in the month of August alone (up from 0.1% in July). And "core inflation" (excluding food and energy) rose 0.3% in August -->that's above expectations. Higher gas price accounted for a third of the increase in August, but shelter, eating out, transportation and new & used vehicles all had significant price increases as well.

Who's actually buying U.S. government bonds these days? @byHeatherLong, Chief Economist at @NavyFederal, tells us on #FacingTheFuture that traditional buyers like Japan and China have pulled back, and Cayman Islands hedge funds with no stake in America's success have stepped in instead. Tune into the latest episode: piped.video/UJEBadHcXAs

At more than $216 per barrel, US diesel futures are now at their highest level in history. We just busted through the prior record set at the height of the 2022 crisis.

Most days there are only two kinds of news about newspapers: Bad and worse. But in Washington, DC, there’s something unexpected happening: A new-age version of an old-school newspaper war, with feisty competition between two formidable newsrooms... cnn.com/2026/09/09/media/was…

There's a big warning sign in the bond market. The 10-year yield topped 4.84% today --> the highest since November 2023. Why? 1) Inflation is picking up again. Diesel nearing $6. Brent oil over $100/barrel. More trade wars. More AI/chip demand. More healthcare cost increases 2) Will the Fed act? They will likely hike in September, but it's still a question mark. 3) US debt at $40 Trillion. Annual deficit set to top $2 Trillion. And there's no action to address it 4) AI bond issuance is big and many investors prefer loaning money to tech than the US gov't 5) US Treasury intervention triples to $6 billion. That looks desperate. If anything, it's backfiring. This is not a "debt crisis," but it's a warning. Good breakdown on this podcast on what it means: piped.video/watch?v=7g8AS7P5…

I’m one of at least 28 former Washington Post journalists who have joined the @washingtonsun, which launched this morning. Paul Kane, Jeff Stein, Tom Sietsema and many other names will be familiar to Post readers —and we’ve got the Capital Weather Gang. Join us! washingtonsun.com/perspectiv…

Proud of my alma mater @Wellesley for announcing today that it will be tuition free for U.S. students from families earning $200,000 or less. Students from families earning $100,000 or less will also have NO LOANS. This is a bold step that makes Wellesley the second small liberals arts college to do this. Wellesley was life-changing for me and I hope more students can access it now. wellesley.edu/admission-aid/…

Spot on from @DianeSwonk If the Fed holds in September, that will also look political. Honestly, the best case scenario is a clear signal from the August inflation data for the Fed. Hot August inflation data would seal the deal for a hike.