WTI Holds Losses As Crude Production Hits Record High, SPR/Cushing Near 'Tank Bottoms'

Distillates have gone vertical again and physical markets remain incredibly tight, according to Goldman's Rich Privorotsky.

Saudi’s East-West pipeline disruption forced the suspension of Yanbu loadings and cancellation of some European cargoes, with European physical crude trading north of $130 in places yesterday.

Despite all that, there are reports of more visible signs of cargoes moving through the Strait.

"Iraq's seaborne crude oil exports from its southern Gulf terminals averaged 3.16 million barrels/day in the first 10 days of September, nearing the prewar levels of 3.335 million b/d recorded in February" - Platts.

But for now, the market is watching inventories...

API

• Crude +7.1mm

• Cushing -246k

• Gasoline +1.5mm

• Distillates +1.6mm

DOE

• Crude -640k (-1.4mm exp)

• Cushing -342k

• Gasoline +794k

• Distillates +1.58mm

US crude stocks drew down inventories for the 3rd week in a row (though only by a de minimus 640k) but drastically different from the 7.1mm build that API reported.. 

Cushing stocks fell again, putting tank bottoms in view...

The Trump admin drained the SPR once again, but the 403k draw was the smallest since the war began...

...as 'tank bottoms' loom for the reserve...

US crude production was steady at record highs...

Refiner crude runs fell in most US regions last week but remain at the highest seasonal level since 2018. Runs last week were less than 100,000 barrels a day below reaching the highest seasonal level ever, continued evidence of how hard the US fuel-making fleet is running.

WTI was trading around $103 ahead of the official data

To close, we go back to where we started with Goldman's Rich Privorotsky noting that while he admits to having no special insight in Energy, like everyone else, he's trying to focus on incentives.

"Economically, it is rational for all sides to try to find a pathway toward a deal, but I have very little certainty around timing/outcome...it does seems more is getting out of the strait then people appreciate."

With gas prices at record highs for this time of year, President Trump has lots of incentives...

Especially with the odds of a Democratic Sweep in November soaring...

China increasingly feels like an important potential catalyst.

Araghchi is in Beijing for talks with Wang Yi today, while Bessent meets He Lifeng this weekend ahead of the planned Trump-Xi summit on September 24. Iran is expected to feature in those discussions. China has meaningful economic leverage with Tehran and a direct channel into Washington... if Beijing wants to use both, that creates a credible bridge toward an off ramp.

Feels like the key potential diplomatic pathway to watch...

Tyler Durden Wed, 09/16/2026 - 10:40

SK Hynix Explores First US Memory Chip Production With Intel

Intel’s unfinished Ohio manufacturing buildout could wind up getting an unexpected tenant: SK Hynix, according to Reuters.

The Korean memory giant is exploring several ways to establish chip production in the United States, including a possible arrangement involving Intel’s Ohio facilities. One concept would give SK Hynix access to unused factory capacity there. A more ambitious structure could bring Intel, SK Hynix and major cloud companies together in a new partnership aimed at increasing the supply of memory needed for AI infrastructure.

Reuters reports that nothing has been finalized, and exactly what SK Hynix might produce in Ohio remains an open question. The company makes everything from conventional DRAM and NAND storage to high-bandwidth memory, where it has become a critical supplier to the AI industry.

The timing makes sense for both companies. AI data-center construction has created enormous demand for memory, while SK Hynix is being pushed by customers and governments to increase production. Intel, meanwhile, has billions of dollars tied up in an Ohio expansion that has taken much longer than originally planned. The first factories there are now expected around 2030 and 2031.

Building memory chips in America would carry a higher price tag than doing so in Asia, where SK Hynix already benefits from an established semiconductor ecosystem. But economics are no longer the only consideration. Washington has been aggressively trying to move more semiconductor manufacturing onto American soil, including by threatening steep tariffs on overseas producers that fail to expand U.S. capacity.

That creates an awkward balancing act for SK Hynix.

South Korea also wants more semiconductor investment at home and treats some advanced chip technologies as strategically important.

Moving production of sophisticated memory such as HBM or DRAM overseas could therefore face additional scrutiny from Seoul.

SK Hynix says it is examining different options for expanding its manufacturing base but has made no final decision regarding Intel or U.S. memory production. Intel has declined to discuss the reported negotiations while reiterating that work on its Ohio site continues.

For Intel, even an exploratory deal offers an intriguing possibility: turning part of a delayed and enormously expensive manufacturing project into capacity for one of the biggest beneficiaries of the AI boom. Investors liked the idea.

Tyler Durden Wed, 09/16/2026 - 10:25

Pivots

By Bas van Geffen, senior macro strategist at Rabobank

The situation in the Middle East remains on an escalatory path, with Houthi attacks on Saudi Arabia now a regular event. Attacks have already damaged the east-west pipeline, which allowed Saudi Arabia to bypass the Strait of Hormuz.

The damage to the pipeline increases Iran’s leverage. It forces Saudi Arabia to pivot back to oil exports through the Strait of Hormuz. Bloomberg reports that the country is already increasing sales of spot cargoes for ship-to-ship delivery in the Gulf of Oman, which means that the Saudis are taking the responsibility and risk of transporting the crude through Hormuz.

Saudi Arabia has been loading 8.7 million barrels of crude oil today (2026-09-15) at its east coast terminals.#OOTT #IranWar #Tankers pic.twitter.com/Md6iM6ehgi

— TankerTrackers.com, Inc. (@TankerTrackers) September 15, 2026

Further supply risks follow from the Houthis taking key areas around the Bab el-Mandeb strait and rumors they have laid mines in the waterway, which puts new constraints on tanker movements. Following the unfolding escalation in the Middle East, we have updated our energy forecasts.

The energy market had already shifted higher on the news of re-escalation, and prices of crude and refined products are drawing new attention from motorists and lawmakers. Yesterday, US Senate Majority Leader Thune said he is “open to exploring” a diesel export ban if that helps ease domestic price pressures. If this idea gets more traction, it would predominantly be at the cost of Europe and South America. Or could these new supply chain disruptions be the catalyst for more countries to send military assets to the region?

The energy supply shock is also creating an increasingly difficult situation for central banks. Interest rates continue to rise in tandem with energy prices. Our US strategist still believes that the nature of the shock does not warrant a hike, but a credibility problem is pushing the Fed into a corner.

Markets expect much more than a one-and-done hike, but the same goes for expectations embedded in curves where central banks have shown a more proactive response. Yesterday, EUR money markets priced more than four additional rate hikes on top of the two the ECB has already delivered.

Policymakers probably do not mind some financial tightening that follows from rate hike expectations, but markets have probably gotten a bit too far ahead of the central banks – which are increasingly struggling to balance inflation and growth risks, and growing uncertainty.

If rate setters do not give any pushback, the market could wag the central bank into further rate hikes and more restrictive policy than they may deem necessary. Yet, pushing back is difficult. Inflation risks remain to the upside, and central bankers don’t want to sound complacent since this could affect inflation expectations.

In her press conference last week, ECB President Lagarde already refused to reaffirm that markets “understand the ECB’s reaction function well,” which we construed as a hint that the market may be moving faster than the policymakers like. Even though energy-driven inflation is set to increase further, price pressures are still mostly driven by that supply shock and there is no evidence that inflation is spreading.

Yesterday, anonymous sources “leaked” to MNI News that any next move would probably not be in October, but in December. Market-implied odds for the October meeting dropped from a likely hike to a coin toss after the news broke. And interestingly, the story also suppressed pricing for the next 12 months – suggesting that the pushback helped to dampen expectations of a more forceful response across the board. We imagine there may be more leaks in the coming weeks to at least lessen the expectations for the October meeting.

Likewise, the market pared back expectations for the Bank of England somewhat after today’s inflation data. UK inflation was in line with expectations, with higher energy and fuel prices the main cause of the rise to 3.1% y/y. Beyond that, there is very little that may alarm the MPC ahead of their meeting: core CPI and services CPI are both unchanged, and food CPI is also not doing what was expected.

Combined with yesterday’s labor market report, which showed slack continuing to rise, and survey evidence from the DMP that showed relatively muted selling price expectations, this all suggests that second-round risks remain contained. The data clearly support a hold tomorrow at 3.75%, which is already around 50bp above economists’ estimates of the UK’s neutral rate.

Whereas the ECB provided some hints about their next move, the central bank has yet to provide clarity on its leadership. The central bank’s staff have reportedly urged President Lagarde to state whether she does or does not intend to serve her full term, so that uncertainty does not undermine the institution. Rumors of Lagarde’s early departure still rampant, and Ms. Schnabel has also been tipped to leave early to fill a vacancy at the IMF.

In addition to personal motivations, the prospect of Le Pen winning the French presidential elections is fuelling speculation that European leaders want to fast-track key decisions to avoid that the Eurosceptic can delay or derail them.

Indeed, France may have started horse trading for the three soon-to-be-vacant seats in earnest. Reuters reported that President Macron may support Klaas Knot’s candidacy for ECB president if the chief economist job goes to a French candidate. We can certainly name a couple of French economists who would be suitable. However, Germany may also eye the economist role instead of Schnabel’s current focus on market operations.

Internal divisions already complicate decision making on multiple fronts. European diplomats poured some cold water on PM Carney’s hopes to strengthen the ties between Canada and the bloc, to strengthen the countries’ position versus the US and China. Unsurprisingly, the countries that rely most on NATO’s deterrence are wary of the damage this could do to EU-US ties.

Tyler Durden Wed, 09/16/2026 - 10:05

Diesel Crack Spread Explodes To Record As Russia Weighs Longer Export Ban, US Eyes Its Own

Diesel futures and refining spreads climbed to record highs as worsening supply disruptions in the Gulf and Russia tightened availability of the industrial fuel that powers the global economy.

Potential export restrictions, or at least extending risk, are compounding the squeeze: Moscow is reportedly considering extending its diesel export ban, while Senate Majority Leader John Thune told reporters Tuesday he was "open to exploring" a US diesel export ban.

Nymex heating oil futures, the US benchmark for diesel, jumped 6.1% Tuesday to their highest settlement in records dating to 1986. European gasoil futures climbed 6.2% to a record in data going back to 1989. 

The squeeze was even more severe in refining spreads. The US heating oil crack, which measures the difference between fuel and crude prices, surged to $117 a barrel on Wednesday morning, the highest level in Bloomberg data going back to 2009.

Moves in diesel and refining spreads show the energy shock isn't necessarily in crude available on global markets but is, in fact, festering deep inside the industrial fuel market as a global refining crisis. 

Russia is considering extending its diesel export ban through October, potentially adding pressure as the Northern Hemisphere approaches winter.

Barclays refining and midstream analyst Theresa Chen commented to clients on Tuesday about Thune's comments on a potential US diesel export ban. She said, "Given renewed discussion surrounding a diesel export ban, we discuss the potential implications across our refining coverage. We continue to view the possibility of an export ban as both detrimental to the US refining complex and unlikely to provide the intended price relief."

At the start of the week, Bloomberg Intelligence senior commodity strategist Mike McGlone warned that the diesel price shock echoes similar moves gasoline made during the 2008 energy shock.

Tyler Durden Wed, 09/16/2026 - 09:45

Rep. Mace Demands Public Execution For Lindsay Clancy

Authored by Steve Watson via Modernity News,

Speaking to TMZ DC on Monday, the South Carolina Republican called Clancy a "serial killer" and demanded the death penalty as a public spectacle.

"Her children are dead. She should be dead too," she said. "She should get the death penalty. It should be public. It should be a public execution."

I didn't know you could bleep the word retarded?

— Nancy Mace (@NancyMace) September 15, 2026

When the reporter asked what that would look like, Mace did not retreat. "It could be by a firearm; it could be the electric chair. I don't really care. Not an injection."

Pressed again on whether she wanted Clancy in the electric chair in front of a crowd, she answered, "A hundred percent." Then she put the point in the plainest English available: "She's a serial killer. She should get the electric chair. She should get the death penalty. It should be public. It should be a warning to women everywhere. You don't kill your kids."

She later posted on X that Clancy "doesn't deserve to live." After TMZ bleeped a slur she used for Clancy's lawyer, she posted again: "I didn't know you could bleep the word retarded?"

Massachusetts has not carried out an execution since 1947. Its highest court struck down the state's capital statute in 1984. First-degree murder there means life without parole.

Clancy's lawyer, Kevin Reddington, has spent the trial arguing postpartum psychosis and a lack of criminal responsibility for the murders. Prosecutors said she cleared the house, chose a method (strangulation) that worked on the children, and chose a different method for herself that failed.

After 21 days of testimony, more than 80 witnesses and roughly 38 hours of deliberations, the jury hung. Judge William Sullivan declared a mistrial on September 4. The defense has said the split was 11-1 for not criminally responsible.

One juror - described in coverage as a Black man in his 30s - would not sign that finding. Reddington tried to have him ejected. The judge refused. The Massachusetts Supreme Judicial Court denied an emergency appeal. Outside court, Reddington said the other jurors had been "robbed by one man, for whatever his agenda was," and added, "I hope that guy can sleep well at night."

In mid-August, hundreds of women in pink gathered outside Plymouth Superior Court for a "Stand in Peace." They cheered when Clancy's transport arrived. Organizer Renee Kimball said, "I think that every one of us women believe that it could be any one of us." Another supporter put it more bluntly on camera: "It could be me."

Online, the same cohort poured money into a GoFundMe for Clancy's parents that raced toward seven figures. TikTok mothers filmed themselves "relating" to the confessed killer while holding their own infants. Some insisted Patrick must have done it, in spite of Lindsay's admissions, her lawyer's opening, the 911 tape and the lawsuit that says she killed the children.

After the mistrial, Patrick Clancy's lawyers said he and his family had been hit with "a relentless, escalating and destructive defamation campaign" from "minor celebrities, so-called influencers and outright conspiracy theorists" selling the lie that the father was involved.

Attorney Howard Cooper said the smear sat "at a fever pitch," with real threats to Patrick's reputation, livelihood and life. "Enough is enough - this spread of blatant and baseless falsehoods must stop," Cooper said.

Law enforcement was notified. Patrick has said before that he forgives Lindsay and calls her ill rather than evil. That distinction has not interested the people targeting him.

While the Clancy jury was still out, an Illinois mother named Corie Walsh hanged her 2-year-old son, Barrett, from a basement rafter in Frankfort. She told police the boy was the "devil" and the "anti-Christ." Witnesses said she had become "very invested" in the Clancy trial and was still texting friends about it hours before the child was found.

Her lawyer reached for the same word the pink shirts have been rehearsing: psychotic episode. Prosecutors said she spoke of harming the remaining children and her husband.

Then Oprah flew in for a "watershed" taping branded as understanding postpartum psychosis. A doctor in the room demanded "the same passion for people who don't look like Lindsay," complained about "melanin" and "privilege," and asked the audience to keep "the pink shirts and the energy" for other women in prison "for this same thing." The room cheered.

When a young woman stood up and said, "I do believe she's a murderer," Oprah answered: "After all you've heard today?"

That is the moral arithmetic this case has been selling. The children are scenery. The mother is the cause. The man who will not play along is the problem.

Last week Reddington went on Good Morning America and asked President Trump to pardon his client. "Mr. President, I would hope that you would consider this young lady and the person she is, what she's been through, and consider a pardon," he said. A president cannot wipe away a Massachusetts murder case. Reddington knows that. Mace called the stunt "nasty" and "ugly."

Trump has not played chaplain to the fan club. After the mistrial he said Clancy "did a horrible, horrible thing," that "there'll be a price," and that it would be "mental institution or jail or something."

Asked again after the pardon plea, he said it is "a state situation, not a federal one." "There is no winner there," he added. "There's no win no matter what you do. Three children are dead."

Mace added child rapists to her list of public executions and asked the only follow-up that matters in a culture that medicalizes everything except the bodies in the basement: "If people can get away with murdering children, what else can they do? ... There are no rules. There are no laws."

Tyler Durden Wed, 09/16/2026 - 08:45

WTF Chart Of The Day: Retail Sales Record High, Consumer Sentiment Record Low

Following last month's ugly decline ("see the consumer is getting crushed because of Trump"), August's retail sales is expected to rebound strongly ("see, Trump's war is causing Americans to spend more on gas and less on Louboutin shoes"). BofA's omniscient analysts agree with consensus, seeing a 0.8% MoM jump...

Quick reality check - July retail sales weakness was driven by a plunge in non-discretionary spending by higher income households...

So, what did August bring?

Headline US retail sales rose a shocking 1.2% MoM - the biggest jump since March, pulling sales up 6.0% YoY...

...driven by a big reversal in non-store retailer (online) sales...

Core (Ex-Autos & Gas) soared 1.4% MoM - its strongest month since Sept 2024

The Control Group - which feeds into the GDP calculation - jumped almost triple expectations (+1.4% MoM vs +0.5% exp).

Under the hood, Building Materials Sales were the only component that declined MoM...

Finally, Real retail sales - admittedly roughly adjusted for CPI - continues to trend higher...

"August’s retail sales mirror the strong payrolls report, dispelling worries about a slowdown anytime soon. Even if higher prices are making consumers unhappy, they’re not doing much to hurt the economy yet. Higher important and export prices also showed inflationary pressures," says David Russell, head market strategist at TradeStation.

"The data is hawkish and the case for a rate hike keeps growing."

So, the consumer is strong and spending after all... despite near record low sentiment?

Real data versus Democrat-biased sentiment? Is it really worse than the very trough of the COVID pandemic?

Tyler Durden Wed, 09/16/2026 - 08:38

The post Trump’s 600% Price Cuts on Drugs are Nowhere to Be Found, but Spending Growth Has Slowed appeared first on CEPR.

Futures Rise, Oil And Yields Dip Ahead Of First Fed Hike In Three Years

Futures are higher into Fed Day where consensus is for a 25bp hike, the first since July 2023, with unknown levels of communication, and the question is what the dot plot shows (see preview here). S&P 500 futures are up by 0.3%, finding relief after days of selling as traders wait Kevin Warsh to deliver an expected interest-rate hike that will help ease fears that inflation may spiral. Nasdaq futures are up 0.6%, with Intel shares jumping 3% in pre-market trading on a report it’s in talks with Korea’s SK Hynix on making memory chips in the US; Software is lower; cyclicals are outperforming defensives as the AI theme is pushing both Tech and Industrials higher. As JPM notes, the market looks to climb the latest Wall of Worry across Fed, AI, and Iran-induced energy inflation. Bond yields are down 2-3bp with USD flat. Commodities are higher led by Metals (Precious over Base) and Ags while crude/fuels are seeing some profit-taking (don't expect it to last). US economic data slate includes September New York Fed services business activity, August retail sales and import/export price indexes (8:30 a.m.), July business inventories and September NAHB housing market index (10am) and July TIC flows (4pm). 

In premarket trading, Mag 7 stocks are mostly higher: Meta shares are up 0.6% after Citi opened a 90-day upside catalyst watch on the Facebook parent, seeing a positive roadmap ahead, especially on AI-related products (Alphabet +0.02%, Amazon +0.2%, Apple +0.1%, Microsoft -0.3%, Nvidia +0.4%, Tesla +0.1%)

• Cryptocurrency-linked stocks are soft a day after the Clarity Act’s failure in a procedural vote sent them tumbling.
• Alvotech (ALVO) rises 7% as Barclays double upgrades the biotech company to overweight ahead of the FDA’s upcoming decision.
• Intel (INTC) is up 3% after Reuters reported that SK Hynix is in talks with the chipmaker about a deal that ​would see it manufacture memory chips in the US for the first time.
• JB Hunt (JBHT) slides 11% after the trucking company flagged rising costs and issued a rare earnings warning at a Morgan Stanley conference.
• Rocket Pharmaceuticals (RCKT) rises 4% after Needham upgraded the drug developer to buy, citing the FDA’s alignment to continue its rare-disease trial.
• SimilarWeb Ltd. (SMWB) gains 4% after Needham upgraded the web services firm to buy, citing recent meetings with the company’s management team.

In other corporate news SK Hynix is in talks with Intel about a deal that ​would see it manufacture memory chips in the US for the first time, Reuters reports. Brookfield has agreed to buy Reliance Worldwide in an all-cash deal that values the Australian plumbing supplies company at around A$4.1 billion ($2.9 billion). OpenAI is holding early talks with investors about a fresh funding round that would value the company at more than $1.2 trillion ahead of an IPO.

Bond markets are steady and stocks are nudging higher as traders prepare for the Federal Reserve decision later.

The Fed is expected to lift rates for the first time since 2023, with policymakers increasingly doubtful that inflation will cool sufficiently without tighter policy (see our preview here). Spiking oil prices have added to fears that price pressures are accelerating, contributing to a rise in bond yields to the highest in decades and weighing on stocks.

Money markets see a more than 90% chance of a quarter-point hike, with another move fully expected by December. The combination of above-target inflation, rising energy prices, strong employment and a robust economy all call for policy tightening, wrote Kevin Thozet at Carmignac.

“The Federal Reserve has little choice but to hike rates on Wednesday, especially since the bond market has been signaling for weeks that higher rates are warranted,” said Carol Schleif at BMO Wealth Management. “The stock market would be disappointed if the Fed didn’t hike.”

The Fed’s guidance has “boxed it” into a rate increase that may do relatively little for inflation, according to Bloomberg Economics. The hot August CPI report cemented market expectations of a hike, though much of the inflation gain was due to a single category, wireless phone services. At the same time, Chair Warsh’s preferred gauge suggests inflation breadth has narrowed. The Fed’s quarterly outlook will prove more interesting, with updated economic forecasts and interest-rate projections. However, don’t hold your breath for Warsh’s input as he didn’t join in when officials last submitted expectations in June.

Iain Stealey, fixed-income international chief investment officer at JPMorgan Asset Management, said he would be watching for dissent among policymakers, even though his base case is that officials will put up a united front.

“If you started to see some dissenters it might call into question how much credibility they’ve got around this sort of fight against inflation,” Stealey told Bloomberg Television.

Energy could be back in the headlines later, with the EIA crude oil inventory report due at 10:30 a.m. New York. Norfolk Southern’s CFO compared fuel prices to something out of “science fiction” as the rail freight company warned of a huge cost headwind from diesel.

The cost of hiring VLCC tankers to ship US crude to Asia has surged to fresh records this week. The energy shock is becoming a political hot potato — from natural gas prices caught in a perfect storm to AI becoming a midterm test as data centers suck up power supplies. BNEF expects 2035 power-sector gas demand to jump around 50% from 2025 levels.

Debates around AI continue at pace. BlackRock’s Larry Fink warned delays in the build-out of AI because of public opposition will make the technology the “domain of large firms,” limiting access. Meanwhile, South Korea’s deputy prime minister said the country can’t afford to slow down the pace of AI development. Intel Corp. outperformed in US premarket trading, rising 3%. The firm is in talks with SK Hynix Inc. for the South Korean chipmaker to produce memory chips in the US for the first time, Reuters reported. Software makers and oil producers lagged.

Equity markets will remain choppy over the next few weeks until earnings season arrives, giving investors something more fundamental to trade on, said BMO’s Schleif. 

“In the meantime, investors will only have the angst kicked up by midterm election rhetoric and inflation data to watch for hints about whether or not we might see additional rate hikes,” she said.

Elsewhere, the US and China are discussing slashing tariffs on goods including American energy and agricultural products ahead of the leaders’ summit next week, while Nvidia’s CEO is slated to attend Trump’s state dinner with China’s Xi.

Retail sales data before the US market open will likely give the Fed little reason to worry about demand, according to Bloomberg Economics. The August report is expected to show a strong rebound in nominal sales, with higher prices and seasonal effects adding to the strength, wrote economist Eliza Winger.

The Stoxx 600 rises 0.2% as banks bounced back from two days of declines, with miners and utilities leading the way, while autos and consumer stocks are the laggards. Here are the biggest movers Wednesday:

• Soitec gained as much as 14% as JPMorgan upgraded the shares to overweight and more than doubled the price target, saying raised expectations for the company’s photonics business more than compensate for concerns in mobile
• Barratt Redrow shares rose as much as 9%, the most since April, after the homebuilder delivered annual adjusted profits ahead of expectations
• European banks advanced after two days of declines as JPMorgan forecast third-quarter gains for trading revenue and investment-banking fees, a contrast from Bank of America’s warning earlier this week
• Engcon gained as much as 7.9% after Danske Bank initiated coverage of the Swedish construction equipment firm with a buy rating, saying it is well-positioned to benefit from a recovery in demand as it refocuses on core European markets
• ISS gained as much as 3.6% after Danske Bank raised its recommendation on the Danish facility services firm to buy from hold, saying it is “well prepared to continue its current strong organic growth trajectory, while also being in a position to lift margins further.”
• Marks & Spencer fell as much as 4.7% to its lowest since June after BNP Paribas cut its 1H profit before tax estimates
• Moonpig shares fell as much as 8.5%, weighed down by the UK online gift retailer’s comments on experiences revenue and broader weakness in the country’s retail stocks after inflation rose to a five-month high
• WH Smith shares slipped as much as 4.7%, before paring the drop, after the travel retailer reduced its profit guidance amid margin pressures

Earlier, Asian stocks rose, helped by a rebound in the heavyweight technology sector, with attention turning to the Federal Reserve’s highly anticipated rate decision that’s set to influence the near-term path for global equities. The MSCI Asia Pacific Index was up 0.6%, poised to snap a four-day losing run. Chipmakers SK Hynix, Samsung and MediaTek were the biggest boosts. A subgauge of tech names climbed 1.3% to be the top performer among sector groups. Sentiment also got a boost as oil dipped, though inflation concerns remain elevated with Brent still trading around $108 a barrel. The Fed is widely expected to raise interest rates, marking the first increase since 2023. Stocks are gaining because investors “know there is going to be a move — the Fed aren’t exactly catching investors off guard here,” said Josh Gilbert, lead APAC analyst at Etoro. “A hike looks likely, so the focus shifts to whether this is a one-and-done move.”

In FX, the Bloomberg Dollar Spot Index was little changed as traders see the Fed raising borrowing costs for the first time since 2023 to address inflation risks that have risen from booming capital investment and higher energy prices

• USD/JPY +0.1% to 154.92
• EUR/USD little changed at 1.1551 
• GBP/USD little changed at 1.3481 

In rates, treasuries are little changed and the picture in Europe is mixed, with a small rise in yields in Germany but a decline in the UK following inflation data.  Treasuries hold small gains, keeping 10-year yields just below 5%, ahead of an expected Fed rate hike at 2 p.m. New York time and Chairman Warsh’s news conference at 2:30 p.m. Falling oil prices are a main driver after a US industry report pointed to a rise in stockpiles. Gilts outperform led by front-end tenors after UK August inflation data sparked a drop in expectations for Bank of England rate hikes.  US yields lower by 1bp to 3bp with curve spreads narrowly mixed; UK 2-year yield is lower by nearly 9bp, 10-year by about 6bp. IG dollar issuance slate is empty so far and expected to stay muted by the impending Fed decision. Six offerings totaling about $9 billion were priced Tuesday with issuers paying about 3bps in new issue concessions on deals that were 6.3 times covered. Treasury auctions resume Thursday with $19 billion 10-year TIPS reopening

In commodities, oil is lower for the session, with Brent is just below $108/barrel, while gold prices have rallied back above $4,300/oz and Bitcoin is slipping below $76,000. WTI crude futures around $103 a barrel are down more than 2% from highest closing level since mid-May, supporting bonds globally; Brent crude fell toward $107 after rising 4% over the previous two sessions

US economic data slate includes September New York Fed services business activity, August retail sales and import/export price indexes (8:30 a.m.), July business inventories and September NAHB housing market index (10am) and July TIC flows (4pm)
Fed speaker slate resumes Friday with Governor Bowman (9:30am) and Kansas City’s Schmid (11:45am) scheduled so far

Market Snapshot

Top Overnight News

• Markets Anticipate Fed’s First Rate Hike Since 2023: WSJ
• Warsh's words may matter more than the anticipated Fed rate hike: RTRS
• Bond traders have piled into bearish positions ahead of Wednesday’s Federal Reserve meeting, betting that the Treasury selloff driving yields to their highest in almost two decades will continue: BBG
• Saudis pound Yemen as Houthis solidify gains in new theatre of Middle East war: RTRS
• U.S. Is Burning Through Its Supply of Interceptors to Counter Iran’s Attacks: WSJ
• European Commission President Ursula von der Leyen proposed Canada becoming the first associate member of the European Union: BBG
• OpenAI Considers Pre-IPO Funding Round at More Than $1.2 Trillion Valuation: WSJ
• OpenAI's rogue agents probed Hugging Face two months before major hack: RTRS
• Apple Finally Built a Smarter Siri. It Still Hasn’t Caught Up in the AI Race: WSJ
• Even as Donald Trump blasts Anthropic PBC’s Dario Amodei over his call to hit the brakes on AI development, the two agree on the need to prevent China from catching the US. But doing that remains difficult in practice: BBG
• The UK’s strategy to prop up its long-maturity debt by selling less in the wake of the Liz Truss-era crash is failing to pay off.
• American Businesses Have No Idea How to Set Prices Right Now: WSJ
• Deep in Trump country, a revolt against corporate money could reshape political spending: RTRS
• Former Kosovo president Thaci sentenced to 25 years for war crimes: RTRS
• Support acts quit Ed Sheeran tour in solidarity with pro-Palestinian rapper: RTRS

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed in choppy trade, albeit with sentiment gradually improving, following the declines on Wall St and recent upside in oil, while participants now await the major central bank rate decisions, beginning with the FOMC later. ASX 200 eked slight gains with strength seen in the commodity-related sectors and with sentiment also helped by M&A news after reports that Brookfield is to acquire Reliance Worldwide for USD 2.8bln, although gains are limited amid weakness in tech, real estate and consumer stocks. Nikkei 225 traded indecisively after mixed data from Japan, in which Exports and Imports topped forecasts, but Machinery Orders disappointed. KOSPI edged higher in two-way trade after swinging between gains and losses, while the tech heavyweights have shown some resilience with SK Hynix mildly underpinned after its union approved the tentative wage agreement in a re-vote. Hang Seng and Shanghai Comp were mixed in range-bound trade, with the Hong Kong benchmark lacklustre as the special administrative region unveiled its first-ever Five-Year plan to align more closely with China, which some fear could be a step away from a free market, while the mainland pared initial losses with the PBoC upping its liquidity efforts.

Top Asian News

• Hong Kong unveiled its first Five-Year Plan to align more closely with mainland China and stated it will adhere to the one country, two systems principle, as well as strengthen the role of the global offshore renminbi business hub. Hong Kong will hold an executive-led system, adopt a holistic approach to development and security, while it will attract China financial firms to the city for business and develop a commodity trading ecosystem. Furthermore, it aims to speed up the Northern Metropolis development and targets GDP growth within a reasonable range in the Five-Year Plan.
• PBoC Governor Pan said slower loan growth may become a 'new grateful' and that slower credit growth can stabilise debt levels, while China will support local government financing vehicles to resolve debt risks. Furthermore, Pan said they will improve the short-term interest rate adjustment mechanism and further refine policy rates, as well as strengthen the role of policy interest rates.
• China's Defence Minister said global security governance must be strengthened and they must build an equal and orderly multi-polar world, as well as find a new path to security featuring collaboration rather than confrontation and should uphold multilateralism. Furthermore, he stated that they support regional countries to decide their own future without external interference, while risks should be anticipated and diffused early to prevent minor friction turning into major disputes.

European bourses (STOXX 600 +0.3%) are firmer across the board, rebounding from Tuesday's losses. The pullback in bond yields have helped support equities, with energy prices also lower today. Constructive commentary by Iranian FM Araghchi adds to the positive tone, stating that the MoU with the US is in effect and looks forward to returning to a diplomatic solution. Sectors lack a clear bias. Basic Resources top the sector pile, with Utilities and Banks rounding out the sector gainers. To the downside lie Autos, with Optimised Personal Care and Media the sector laggards.

Top European News

• EU Commission President von der Leyen delivered her annual State of the Union address. On the trade front, she said the EU's trade deficit with China has reached its tipping point and are engaged with dialogue with China to rebalance trade, however warns of the use of all tools possible to rebalance trade. With Canada, she announced that they will create a common prosperity and economic security space covering manufacturing, technology, energy, AI, defence and the Arctic and proposed that Canada becomes the first associate member of the EU. For EU defence, she said that it is time for an Article 4-style EU security protocol and announced plans to establish a new European Instrument for military strategic enablers. She also announced that the EU will establish a new European cooperation to help obtain and stockpile critical raw materials.
• UK Chancellor Healey is said to be considering budget tax rate on higher stakes slot machines, according to FT.
• Senior German lawmaker Frei said that an energy price relief must come quickly and thinks that energy relief measures should come into effect in October, adding that lower sales tax on gasoline would be an obvious step to take, RTL TV reported.
• Germany's Economy Ministry said it is continuously assessing the situation and maintaining ongoing dialogue with all market participants in the natural gas sector and welcomed SEFE's intention to step up efforts to fill gas storage.

FX

• G10s trade tentatively against the USD ahead of a key FOMC policy decision later today. EUR and JPY hold marginally afloat, whilst the Loonie slightly lags vs peers.
• DXY currently holds towards the lower end of a 99.53-99.73 range. Action has been lacklustre throughout the overnight session and for much of the European morning, with traders ultimately awaiting Retail Sales and the Fed policy decision later today. The former will likely spark little reaction given the close proximity to the Fed. On that note, expectations are for a 25bps hike; attention will be on if it is accompanied with hawkish rhetoric/guidance. This could either be provided through a hawkish set of SEPs, a unanimous hike or overt hawkish language at Warsh’s presser. At least one of these would likely be required to give bond traders enough confidence in market stability, to allow yields to edge off highs.
• Note: A full Fed preview can be found on the Newsquawk Research Suite.
• GBP had regional inflation metrics to digest this morning. Whilst headline rose from the prior (in-line), Core Y/Y and Services was unchanged from the previous month, indicating no signs of second-round effects. Therefore, the data is unlikely to shift views at the MPC into Thursday’s confab, where rates are expected to be held steady in a 6-3 vote split. Following the data, Cable saw some two-way action, before eventually moving lower as traders curtailed their rate hike bets.

Fixed Income

• Global fixed benchmarks are mixed. USTs (-1 tick) are essentially flat, whilst Bunds (-6 ticks) are under mild pressure. Gilts (+38 ticks) outperform vs peers, following the region’s inflation metrics, which keeps a hold at tomorrow’s BoE meeting in play.
• USTs are trading lacklustre within a 105-27+ to 106-02+ range. Ultimately, focus remains on the FOMC announcement later today, where rates are expected to be raised by 25bps. Attention for bond traders will be on whether there is a hawkish aftertaste (decision aside), which would likely allow yields to ease off best levels, given that hawkish commentary would signal that the Fed is offering some stability. Currently, the US 10-year sits around the 5% mark, and towards multi-decade highs.
• Gilts outperform vs peers, benefiting from lower energy prices and following the region’s inflation report. On that point, whilst headline rose from the prior (in-line), Core Y/Y and Services were unchanged from the previous month; there is also a lack of evidence of second-round effects. Therefore, the data is unlikely to shift views at the MPC into Thursday’s confab, where rates are expected to be held steady in a 6-3 vote split. As such, traders curtailed their bets of a rate hike tomorrow, with money markets assigning a c. 30% chance of such a move.
• Germany sells EUR 2.12bln vs Exp. 2.5bln 3.40% 2047 and 2.90% 2056 Bund.
• Australia sells AUD 1bln in 3.75% April 2037 bonds: b/c 3.85x, avg. yield 5.3910%.

Commodities

• WTI Oct and Brent Nov futures are softer after yesterday’s renewed rally. WTI trades around USD 104.90/bbl within a USD 103.76-105.63/bbl range (vs yesterday’s USD 101.21-106.75/bbl range), while Brent trades around USD 108.43/bbl within a USD 107.15-108.59/bbl range (vs yesterday’s USD 105.10-109.45/bbl range). Energy benchmarks have come under modest pressure in recent trade following constructive commentary by Iranian FM Araghchi, stating that the MoU with the US is in effect and looks forward to returning to a diplomatic solution.
• Dutch TTF was initially flat but is now posting mild gains. The Middle East conflict continues to sustain concerns around regional energy flows and European supply security. The contract trades around EUR 80/MWh within a EUR 79.93-83.28/MWh range at the time of writing, with Europe also looking ahead to the winter period.
• Precious metals are firmer as the pullback in oil and Treasury yields provides some relief ahead of today’s FOMC decision, where markets lean heavily towards a 25bps hike. Spot gold has reclaimed USD 4,300/oz and trades around USD 4,330/oz within a USD 4,276-4,341/oz range, breaking above yesterday’s USD 4,317/oz high (vs yesterday’s USD 4,262-4,317/oz range). The Fed remains the key catalyst, with updated projections and Chair Warsh’s guidance set to provide the space with some impetus.
• Base metals are modestly firmer as risk sentiment improves and Treasury yields ease ahead of the Fed, although the fundamental backdrop remains less supportive, with this week’s Chinese activity data showing continued weakness in domestic demand despite stronger industrial production, albeit upping calls for support. 3M LME copper resides in a narrow range above USD 14k/t, currently within USD 14,074.40-14,216.15.
• US Private Inventory Data (bbls): Crude +7.1mln (exp. -1.8mln), Gasoline +1.5mln (exp. -1.2mln), Distillate +1.6mln (exp. +0.8mln), Cushing -0.2mln.
• Russian plans to expand its diesel-export ban through October, according to Russian press.
• CBRT Governor said global central banks are rediscovering gold.
• Aluminium Bahrain CEO Al Baqali said damage to the smelter from the Iranian strike in March has already been repaired.
• A gold mine collapsed in West Kordofan, Sudan, on Sunday, according to sources.

Trade/Tariffs

• US is pressuring Mexican officials to accept new rules for exports of AI hardware to prevent Chinese companies and other foreign firms from circumventing tariffs, according to WSJ.

Geopolitics: Iran

• Iranian FM Araghchi said "The memorandum of understanding with America is in effect and we want to return to a peaceful solution", adding that Iran is not interested in continuing the conflict and looks forward to returning to a diplomatic solution.
• Iran's Major General Rezaei said "there will be no negotiations until Iran's conditions are met".
• IRGC Navy political deputy said no vessel in the Persian Gulf, Strait of Hormuz or Sea of Oman moves outside the supervision of the IRGC Navy, and added that Iran can target any vessel anywhere if it wishes, IRNA reported.
• Iran said only a single-digit number of ships are currently passing through the Strait of Hormuz, disputing US claims that traffic through the strategic waterway is increasing. It was separately reported that Strait of Hormuz vessel transits fell to four, according to data.
• Pakistan's military spokesperson said the Mekkah agreement with Saudi Arabia and Turkey will not affect Pakistan's strategic relationship with Iran, and reiterated that the pact is defensive in nature.
• China's Foreign Minister met with their Iranian counterpart. China encouraged Iran and the US to exercise rationality, urged all parties to take effective measures to reopen the Strait and supported dialogue between Iran and Gulf states.
• Explosions were heard in Iran's Qeshm which originated from the sea, according to IRNA.

Geopolitics: Other

• Ukrainian President Zelensky said if Russia is prepared to agree to an energy ceasefire, it must bar any attacks on energy infrastructure in any form.
• Ukrainian media reports explosions in Kyiv, while Polish military aircraft have been activated amid Russian strikes on Ukraine.
• US mulls purchasing warships from Japan and South Korea to counter China, according to Nikkei.

US Event Calendar

• 7:00 am: Sep 11 MBA Mortgage Applications, prior -2.7%
• 8:30 am: Aug Retail Sales Advance MoM, est. 0.8%, prior -0.6%
• 8:30 am: Aug Retail Sales Ex Auto MoM, est. 0.55%, prior -0.3%
• 8:30 am: Aug Import Price Index MoM, est. 0.5%, prior -0.4%
• 2:00 pm: Sep 16 FOMC Rate Decision est. 3.75%, prior 3.5%
• 4:00 pm: Jul Total Net TIC Flows, prior 133.5b
• 4:00 pm: Jul Net Long-term TIC Flows, prior 172.7b

DB's Jim Reid concludes the overnight wrap

It’s been a familiar story for markets over the last 24 hours, with a fresh selloff as higher energy prices led to mounting fears about stagflation. Various oil supply issues were the main catalyst, which collectively pushed Brent crude (+2.90%) up to its highest closing level since May, at $108.75/bbl. And in turn, that kept up the pressure on bonds, with the 10yr Treasury yield (+1.5bps) breaking above its 2023 intraday peak in trading, to briefly reach a post-2007 high of 5.04%, before falling back to 5.00% by the close. All that meant it was a rough day for equities too, with the S&P 500 (-0.45%) falling to a 6-week low. To be fair, markets have begun to stabilise a bit overnight, but the Fed are now set to take centre stage, with markets pricing in a 94% chance this morning that they deliver their first rate hike today since 2023. 

At the Fed’s last decision in July, markets went into that pricing a roughly 30% chance that the Fed would hike. But even though the decision to hold was broadly expected and in line with the baseline market expectation, there was still a sharp steepening in the Treasury yield curve afterwards given the relative lack of detail from Chair Warsh. Since then, however, Warsh delivered a fairly hawkish message at Jackson Hole in late August, saying that “underlying trends” in inflation had not meaningfully improved, and that if underlying inflation wasn’t getting back to target, then they had “work to do”. So that raised expectations that the Fed would hike at this meeting, which was solidified by the upside surprise in the August jobs report, along with Friday’s core CPI print, which came in higher than expected at +0.3%. 

Our US economists are also expecting that the Fed will hike today, as growth remains solid, the labour market has rebounded, and PCE inflation has demonstrated limited evidence of falling back to target. Moreover, forward-looking indicators suggest the inflation overshoot is likely to persist for some time. Nevertheless, with a hike mostly priced in by markets, the key question for them is how Chair Warsh and the latest dot plot frame the tightening cycle. Their view is that forward guidance is unlikely, but they think the median dot should show another rate increase this year, with several officials projecting more than that. 

Ahead of the Fed’s decision, there was no let-up in rising oil prices, as fresh supply fears continued to push prices higher. First, Reuters reported that shipping industry sources had said that oil loadings at the Yanbu export terminal in Saudi Arabia had been suspended, leading them to cancel September loadings to some European refiners. And separately, we also had some headlines from Libya that output at three oil fields had been suspended. So that added to fears about wider supply disruption, particularly with no sign of the Strait of Hormuz reopening soon either. In turn, that meant Brent crude (+2.90%) moved up to $108.75/bbl by the close, its highest level since May, while WTI crude (+4.38%) saw an even larger increase to $105.83/bbl. And in a sign that investors were pricing in longer disruption as well, the 6-month Brent future (+1.65%) moved up to its highest since May as well, at $92.06/bbl. 

That inflation momentum helped to push up yields to fresh multi-year highs around the world. So in the US, the 10yr yield (+1.5bps) finally closed above 5% for the first time since 2007, at 5.00%. And in trading, it also managed to hit a post-2007 intraday high of 5.04% as well. Moreover, the 10yr real yield (+1.3bps) moved up to a post-2008 high of 2.62%, so this wasn’t just an inflation story. Meanwhile for other maturities, the 30yr yield (+2.2bps) also edged up to a post-2007 high of 5.37%, whilst the 2yr yield (+0.4bps) saw a very modest increase to 4.66%. Long-end yields also weren’t helped by a weak 20yr auction that saw $13bn of bonds issued +2.0bps above the pre-sale yield at 5.42%. 

That steepening pattern was even clearer in Europe, partly because investors pared back the chance of an ECB hike in October. So yesterday, market pricing for an October hike came down from 69% on Monday to 56% by the close. That meant front-end yields also came down a bit, with the 2yr German yield (-0.9bps) falling back to 3.25%. But for 10yr yields it was another day of records. So by the close, the 10yr bund yield (+1.9bps) was at a post-2009 high of 3.53%, the 10yr OAT yield (+3.1bps) was at a post-2008 high of 4.50%, and the 10yr gilt yield (+2.0bps) had hit a post-2007 high of 5.39%. 

That backdrop of rising energy prices and stagflation fears meant the pressure on risk assets continued yesterday. For instance, the S&P 500 (-0.45%) fell to a 6-week low, although there was a stabilisation in chip stocks after Monday's slump, with the Philly semiconductor index (+0.40%) rising slightly. Nevertheless, the decline was a broad-based one, with two-thirds of the S&P 500 lower on the day. A similar picture was clear in Europe as well, where the STOXX 600 (-0.28%) fell to a 3-month low. Now it’s worth noting this still leaves the S&P 500 within 3% of its record high, and the STOXX 600 less than 4% beneath its high, but there’s been a clear shift in momentum relative to early August. Meanwhile, Bitcoin (-4.06%) saw its biggest decline in three months as well as a digital asset market structure bill failed to pass a procedural vote in the Senate. 

Otherwise yesterday, US Treasury Secretary Scott Bessent appeared before the House Financial Services Committee. There weren’t many new headlines, but he did say he’d be meeting his Chinese counterpart, He Lifeng, this weekend.

Overnight in Asia, we have seen markets begin to stabilise again ahead of the Fed's decision. In part, that's been helped by a pullback in oil prices, with Brent down -0.77% this morning to $107.91/bbl. So that's helped equities to advance, including the KOSPI (+1.16%), the Nikkei (+0.40%), the Shanghai Composite (+0.50%), CSI 300 (+0.60%) and the Hang Seng (+0.12%). Moreover, US equity futures are also pointing to a positive start, with S&P 500 futures up +0.22%, and the 10yr Treasury yield down -1.6bps at 4.99%.

Finally, we had a few data releases out yesterday, including on the UK labour market. That showed the number of payrolled employees was down by -26k in August (vs. -5k expected), although the unemployment rate remained at 4.9% over the three months to July. Otherwise, the German ZEW survey showed expectations rising to a 7-month high of 34.7 in September, although that was beneath the 40.0 reading expected by the consensus. That said, the current situation component rebounded more than expected, up to its highest since mid-2023 at -47.1 (vs. -52.1 expected). 

Looking at the day ahead now, the main highlight will be the Federal Reserve’s policy decision and Chair Warsh’s subsequent press conference. Otherwise, we’ll hear from the ECB’s Vujcic and Nagel. Meanwhile, data releases include US retail sales for August, the NAHB housing market index for September, UK CPI for August and Euro Area industrial production for July. Finally, European Commission President Ursula von der Leyen will deliver her State of the Union address.

Tyler Durden Wed, 09/16/2026 - 08:29

Hormuz: Rare US Strike On Iranian 'Small Boats' Caught Trying To Seize Surface Drone

President Trump and the Iranians have been issuing competing claims over who has 'control' over the Strait of Hormuz and the degree to which it is 'open' to global energy transit.

The situation on the ground remains dire, given almost daily hostile confrontations between Iranian and US naval forces there. According to the latest: "The U.S. military destroyed two Iranian small boats Monday after the Islamic Revolutionary Guard Corps tried to steal a Navy drone patrolling the Strait of Hormuz," US officials were quoted in Axios as saying.

Example image of likely surface drone in question: The US 5th Fleet has been operating operating the Saildrone Explorer. via AFP

The confrontation is being dubbed "unusual" for the fact that it involved small boats, and not the larger tankers which have been closely watched by international maritime monitors.

Iranian media reports emerged on the incident Monday, but state sources presented it as a US attack on "fishing boats" - which occurred off the port city of Kargan and near Larak Island.

Here's how US officials and Axios present the he said, she said competing accounts...

Iranian side:

Nafisi said an unspecified number of fishermen were missing and that search-and-rescue operations were underway, according to Iran's semi-official Mehr News Agency.

Pentagon side says:

• A U.S. official said the IRGC used the boats to try to capture a naval drone that the U.S. military uses to patrol the Strait of Hormuz.
• After U.S. forces identified the attempt, an American drone fired two missiles at the boats, destroying them and killing most of those on board.

Judging by videos that widely circulated Monday which appear to show the same incident, the surface drone may have suffered some damage. But again, it's unclear whether the released footage (apparently via the Iranian side) depicts the same incident or possibly a prior episode:

Iran's Islamic Revolutionary Guard Corps (IRGC) says its navy struck a US-operated surface drone at the entrance of the Strait of Hormuz, claiming to have "thwarted an aggressive mission" using the sailboat-shaped device. Washington has yet to comment. pic.twitter.com/lyDDM5Hrfg

— Al Jazeera English (@AJEnglish) September 11, 2026

Further, US Central Command spokesman Capt. Tim Hawkins said of the alleged attempted seizure, "Iranian small boats recently attempted to take possession of a U.S. unmanned surface vessel, but they were unsuccessful after CENTCOM forcefully responded."

Meanwhile...

A U.S.-contracted vessel was hit during an Iranian attack earlier this week, two sources told Fox News.

The incident occurred "around the Strait of Hormuz," and involved four Iranian drones, and at least one missile.

One of the projectiles struck the vessel and caused minor…

— Trey Yingst (@TreyYingst) September 16, 2026

He then noted that the intercept wasn't successful and the the surface drone remains under the operation of US forces. As for aerial drones, the Iranians have downed, captured, or disabled dozens of aerial UAVs throughout the over six-month long conflict. Many have been expensive MQ-9 Reaper drones.

Tyler Durden Wed, 09/16/2026 - 08:05

NATO's 'Collective Defense' Rhetoric Escalates Amid Now Weekly Aerial Incursions

Ukraine war spillover into NATO 'eastern flank' members' airspace is now becoming a weekly reality, which presents added pressure and dangers which could potentially lead up to a major Russia-Western military confrontation. Lead NATO powers like Germany have of late also alleged Russian intelligence 'sabotage' campaigns involving drones near aviation hubs in central Europe.

Over the past years of war, an errant (or intentioned?) drone or missile crossing over into Poland or the Baltic states might have happened once every few months, generating significant headlines and media coverage. But now barely a week passes and NATO leadership points the finger at Russia for alleged aerial incursions.

The latest happened overnight as Lithuania's foreign minister confirmed Tuesday that NATO jets were scrambled and intercepted and destroyed a drone that entered Lithuanian airspace from neighboring Belarus.

NATO image

Belarus is part of a 'Union State' with Russia and hosts its military assets, and also coordinates logistics with Moscow in support of the 'special military operation' in Ukraine.

Lithuanian President Gitanas Nauseda announced on X, "A drone that just entered Lithuanian airspace was destroyed by NATO fighter jets."

"With Russia intensifying its aggression against Ukraine, such readiness is vital for our region," he added. An investigation is on to determine the drone's origins.

One might be tempted to view these incidents as now 'routine' - but what's important is to observe the escalated rhetoric and threats surrounding them. As an example, the following European media report based on 'answering' these incursions in the name of allied common defense is alarming, given the atmosphere of confrontation:

From the Baltics to Poland, Europe's eastern edge is monitoring Russia's war to prevent it spilling over its own borders.

NATO stands "vigilant, committed, and ready," Lithuania's foreign minister said Tuesday, after an allied fighter jet destroyed a drone that crossed into the country's airspace from Belar

Kestutis Budrys credited the interception to the strength of collective defense, thanking the allies whose air presence, he said, protects Baltic skies and reinforces regional security.

But the message lands beyond Vilnius: as Russia's war on Ukraine grinds on, the alliance's eastern members are increasingly treating airspace violations — deliberate or not — as tests of NATO's resolve, and Tuesday's response was framed as proof the system works.

Given there have been instances where Russian-crewed jets have either briefly violated European airspace or come close to it, we are possibly one jet intercept and downing away from something that triggers a shooting war between Russia and NATO.

Lithuania said an Italian NATO fighter jet shot down a stray drone over its airspace, and that it is investigating its origin pic.twitter.com/MpaZljwPnr

— Reuters (@Reuters) September 15, 2026

This underscores the urgency of finding a roadmap toward negotiating an end to the Ukraine war. However, this month's Kushner-Witkoff trip to Moscow to meet with President Putin resulted in little of significance.

Tyler Durden Wed, 09/16/2026 - 07:45

Saudis Threaten Retaliation After Alleged Houthi Drone Attack On Mecca Crosses "Red Line"

Escalation in the Gulf area conflict certainly appeared overnight after Saudi Arabia accused Iran-backed Houthi rebels of targeting Mecca with a one-way attack drone, raising the risk of a deeper conflict as the kingdom's East-West pipeline was knocked offline last week.

Bloomberg quoted the Saudi-led coalition, which said an attack drone was intercepted heading toward Islam's holiest city and warned that protecting religious sites was a "red line."

"The security of the Two Holy Mosques and the pilgrims is a red line, and the Joint Forces Command of the coalition will not hesitate to take the necessary and deterrent measures against the Terrorist Houthi Militia," the kingdom said. 

Rep. Joe Wilson (R-S.C.) wrote on X, "If the Mecca Alliance means anything, then Turkiye and Pakistan must work with Saudi Arabia to destroy the foreign Houthi terrorists and liberate Yemen from Iran."

The Iranian puppet foreign Houthis occupying Yemen now attack the Muslim holy sites of Mecca in Saudi Arabia.

We stand with our partners in Saudi Arabia against the hateful Houthi aggression.

If the Mecca Alliance means anything then Turkiye and Pakistan must work with Saudi…

— Joe Wilson (@RepJoeWilson) September 15, 2026

Hazem al-Assad from the Houthi politburo responded to the incident, saying that "claims about targeting Mecca are a worn-out lie that has been used before and no longer fools anyone."

In any case, the red line that was drawn by the Saudis may only suggest a broadening conflict could be on the horizon, as rebels seized control of Yemen's Red Sea coast and the narrow Bab al-Mandeb Strait. Compounding pressure on another maritime chokepoint, a drone attack last week knocked out Saudi Arabia's East-West pipeline, used to divert 7 million barrels per day of crude from the Strait of Hormuz to Yanbu on the Red Sea.

The disruption forced the Saudis on Tuesday to cancel September-loading crude cargoes bound for Europe, which will only pressure the energy-stricken continent ahead of the Northern Hemisphere winter as a twin energy crisis unfolds, with seasonally low natural gas stockpiles and a deepening diesel crisis.

With crude tanker rates topping $1 million per day through the Strait of Hormuz to Asia, TankerTrackers reports that the Saudis are ramping up crude loadings from their east coast terminals to transit the critical waterway.

Saudi Arabia has been loading 8.7 million barrels of crude oil today (2026-09-15) at its east coast terminals.#OOTT #IranWar #Tankers pic.twitter.com/Md6iM6ehgi

— TankerTrackers.com, Inc. (@TankerTrackers) September 15, 2026

Brent crude trades at $107 per barrel, while WTI is around $104. Meanwhile, US diesel crack spreads topped a record $115 overnight as the refining crisis prompted Senate Majority Leader John Thune on Tuesday to tell reporters he is "open to exploring" a diesel export ban. Earlier, a report said Russia was mulling extending its diesel export ban through October.

Tyler Durden Wed, 09/16/2026 - 07:20

My mid-week morning reads:

​• Costly Medicine: Claudia Sahm on Fed Week — the FOMC is highly likely to hike a quarter point Wednesday, and the Middle East and AI headlines stealing attention are the same stories driving the inflation risk. (Claudia Sahm)

• The Unlikely Political Bedfellows on A.I. Regulation: David Sacks and Lina Khan? Bernie Sanders and Steve Bannon? The debate on artificial intelligence limits is creating unlikely alliances. (Dealbook) see also Here’s why it’s so hard to keep AI agents from going rogue: The techniques that made chatbots more capable can also bake in a tendency to hack, cheat and evade human oversight. Gerrit De Vynck on the gap between January’s optimism — alignment “increasingly looks solvable” — and what the technology is learning about cheating and hacking. (Washington Post)

​• Americans Don’t Understand Who’s Rich: Terry Taylor is worth about $2 billion, doesn’t put his name on the car dealerships he buys, and attends conferences only if nobody announces who he is. The Atlantic on the invisible rich and the tax code built around not seeing them. (The Atlantic)

• Stocks pop when the Trump administration invests, but the gains often fade fast: Stocks in other companies that have struck a deal with the Trump administration have tended to move in the opposite direction, often following a common trajectory: a significant bump around the formal announcement, high volatility afterward, and then gains often given back almost as quickly as they came. (Yahoo)

• American Businesses Have No Idea How to Set Prices Right Now: Diesel crosses $6 a gallon for the first time, and firms can’t tell whether to raise prices or wait it out. Businesses of all stripes are struggling to predict how long high energy costs will last.  (Wall Street Journal)

• Catastrophe Bond Fund Landscape: These products promise higher returns by assuming the risk of catastrophic events. The trade-offs are capacity constraints, limited liquidity, and higher fees. (Morningstar)

​• Oil Executives Say the Great Fuel Crisis Is Here: Chevron’s Mike Wirth and others warn global supplies are running low with no respite in sight — while Trump officials insist the disruption is temporary. (Wall Street Journal) see also Rising Fuel Prices Set Off Anger and Protests Around the World: From Indonesia to Guatemala to Syria, shortages are producing protests and blackouts. (New York Times)

• The U.S. Was Never Going to Win the “War on Terror” Robin Wright on twenty-five years of military campaigns against extremism, almost a million deaths — and the question of what it accomplished. In the twenty-five years since 9/11, the U.S. has waged several military campaigns against extremism around the world, resulting in the deaths of almost a million people. What has it accomplished? (New Yorker)

​• For the Love of God, Please Put on Headphones: “Loudcasting” — using speakerphone to watch videos and take phone calls — is turning public spaces into open-air podcasts. A writer begs for silence.   (Wall Street Journal).

​• 50 Parting Thoughts From the 2026 U.S. Open: Elena Rybakina and Alexander Zverev took home the hardware, while influencers and high ticket prices dominated the conversation at Flushing Meadows. (Sports Illustrated)

Video of the day: Japan’s Toyota Blows Up The Entire Car Market With This BIG announcement

Be sure to check out our Masters in Business with Seth Bernstein, CEO of AllianceBernstein and Head of Asset Management of Equitable Holdings, the 69% owner AB. The firm manages $905.5B. Previously, he spent 32 years at JPMorgan Chase, where he eventually became the Global Head of Managed Solutions & Strategy at JPAM, responsible for all discretionary assets for Private Banking clients, and Global Head of Fixed Income & Currency. He eventually became CFO of JPM’s Investment Management & Private Banking division.

 

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US Troops Leak New Iran War Photos Of Gulf Bases: 'Major Damage Hidden From American Public'

As we've been documenting, it is clear that major damage has yet to be communicated to the American public regarding Iran's major retaliation on US bases in the Gulf and Mideast since the start of Trump's Operation Epic Fury. 

During the same week that a long awaited Pentagon/Department of War Inspector General's report was released covering the first four months of the Iran War, new leaked photographs have emerged of never-before-seen base damage.

"New photos obtained exclusively by CBS News reveal for the first time the widespread damage and destruction of buildings and vehicles at multiple U.S. positions across the Middle East, as a result of Iranian missile and drone attacks," according to a bombshell Tuesday CBS report. Below is from Prince Sultan AFB, Saudi Arabia:

Source: CBS

The outlet describes that the photos have been submitted by US service members under strict secrecy and anonymity - given the Pentagon has sought to enforce a crackdown on troops sharing the extent of damage, and amid orders aimed at maintaining operational security. But critics say the Pentagon and Trump administration are engaged in a cover-up and propaganda. 

"This is major damage to our bases that hasn't been communicated to the American public," an actively deployed unnamed service member said to CBS News.

The service member added: "We're standing there with our eyes closed getting punched in the face."

Below is from Camp Arifjan, Kuwait:

Source CBS

Recent Iranian attacks on bases in Jordan have continued intermittently over the past weeks, and some pundits have warned that American personnel that continue to be stationed there are essentially sitting ducks.

The ballistic missile volleys from Iran have only gotten bigger, such as the last major attack on Muwaffaq Salti Air Base in Jordan during the night of September 8-9.

On Monday the newly released Pentagon Inspector General's report said that "hundreds" of buildings and structures at US bases have been destroyed...

“Iranian strikes damaged and destroyed hundreds of buildings and structures at U.S. bases in Kuwait, Bahrain, Qatar, UAE, Saudi Arabia, Iraq, Oman, and Jordan during the conflict.”

More leaked images via CBS:

It was not just bases that got directly hit, and mainly within merely the opening weeks of Operation Epic Fury - but even consulates, embassies, and intelligence buildings have been targeted and suffered damage.

"U.S. diplomatic facilities in four countries—Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates—suffered physical damage from Iranian strikes," the Pentagon has conceded.

American service members in Saudi are leaking photos of bases destroyed by Iranian strikes that the Pentagon is trying to cover up pic.twitter.com/glyqOKBWwA

— The Gulag (@WelcomeTheGulag) September 15, 2026

According to prior analysis from Amerikanets: "After destroying much of the radar network protecting regional US Axis bases in the previous hot phase of the war, Iranian planners have prioritized targeting fuel storage, drone hangers, refueling tankers, and barracks."

The same analysis concluded: "The American response has been to pull assets back ever further from Iran, to bases in Israel and Jordan. We’ll call this process debasification. Iran’s debasification strategy takes advantage of the inherent asymmetry between the vastly different force structure and capabilities of Iranian rocket forces and US Axis air forces."

See the full photo set here.

Tyler Durden Tue, 09/15/2026 - 20:55

US Troops Leak New Iran War Photos Of Gulf Bases: 'Major Damage Hidden From American Public'

As we've been documenting, it is clear that major damage has yet to be communicated to the American public regarding Iran's major retaliation on US bases in the Gulf and Mideast since the start of Trump's Operation Epic Fury. 

During the same week that a long awaited Pentagon/Department of War Inspector General's report was released covering the first four months of the Iran War, new leaked photographs have emerged of never-before-seen base damage.

"New photos obtained exclusively by CBS News reveal for the first time the widespread damage and destruction of buildings and vehicles at multiple U.S. positions across the Middle East, as a result of Iranian missile and drone attacks," according to a bombshell Tuesday CBS report. Below is from Prince Sultan AFB, Saudi Arabia:

Source: CBS

The outlet describes that the photos have been submitted by US service members under strict secrecy and anonymity - given the Pentagon has sought to enforce a crackdown on troops sharing the extent of damage, and amid orders aimed at maintaining operational security. But critics say the Pentagon and Trump administration are engaged in a cover-up and propaganda. 

"This is major damage to our bases that hasn't been communicated to the American public," an actively deployed unnamed service member said to CBS News.

The service member added: "We're standing there with our eyes closed getting punched in the face."

Below is from Camp Arifjan, Kuwait:

Source CBS

Recent Iranian attacks on bases in Jordan have continued intermittently over the past weeks, and some pundits have warned that American personnel that continue to be stationed there are essentially sitting ducks.

The ballistic missile volleys from Iran have only gotten bigger, such as the last major attack on Muwaffaq Salti Air Base in Jordan during the night of September 8-9.

On Monday the newly released Pentagon Inspector General's report said that "hundreds" of buildings and structures at US bases have been destroyed...

“Iranian strikes damaged and destroyed hundreds of buildings and structures at U.S. bases in Kuwait, Bahrain, Qatar, UAE, Saudi Arabia, Iraq, Oman, and Jordan during the conflict.”

More leaked images via CBS:

It was not just bases that got directly hit, and mainly within merely the opening weeks of Operation Epic Fury - but even consulates, embassies, and intelligence buildings have been targeted and suffered damage.

"U.S. diplomatic facilities in four countries—Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates—suffered physical damage from Iranian strikes," the Pentagon has conceded.

American service members in Saudi are leaking photos of bases destroyed by Iranian strikes that the Pentagon is trying to cover up pic.twitter.com/glyqOKBWwA

— The Gulag (@WelcomeTheGulag) September 15, 2026

According to prior analysis from Amerikanets: "After destroying much of the radar network protecting regional US Axis bases in the previous hot phase of the war, Iranian planners have prioritized targeting fuel storage, drone hangers, refueling tankers, and barracks."

The same analysis concluded: "The American response has been to pull assets back ever further from Iran, to bases in Israel and Jordan. We’ll call this process debasification. Iran’s debasification strategy takes advantage of the inherent asymmetry between the vastly different force structure and capabilities of Iranian rocket forces and US Axis air forces."

See the full photo set here.

Tyler Durden Tue, 09/15/2026 - 20:55

"I Like Them": Trump Weighs In On Flock Surveillance Cameras

You know those Flock surveillance cameras everyone hates? Trump just came out in favor of them. 

A Flock camera monitors traffic in Quincy, Massachusetts. (Greg Derr/Patriot Ledger/USA Today Network/Reuters Connect)

Speaking with reporters on Sunday on Air Force One en route to Joint Base Andrews, Trump endorsed the AI-powered mass surveillance tool. 

"Speaking of [AI], Flock cameras. You haven’t talked a lot about these Flock cameras. A lot of law enforcement say they really help them. Would you be willing to back that?" a reporter asked Trump. 

"No, I sort of like them because of that, because of law enforcement. But some people don’t. They think it’s an infringement," Trump replied, adding "I like them." 

Trump previously said in August that he would make up his mind regarding Flock cameras "over the next couple of weeks," telling the DCNF "You have pros and cons, right? It’s being studied right now." 

As the Epoch Times notes further, in recent months, multiple cities across the United States have removed their Flock cameras, including Tempe, Arizona; Bellingham, Massachusetts; Cave Creek, Arizona; and multiple counties in Texas.

Earlier this month, the Dallas Police Department said the agency would shut down hundreds of Flock cameras in the coming days in response to a pause in funding.

Florida’s Department of Transportation, meanwhile, said in a memo that it would end its use of license-plate reading cameras, including those made by Flock.

More than 100 jurisdictions have canceled their contracts with Flock and other automated license plate reader providers, according to a database from the Institute for Justice, a nonprofit law firm that says it aims to end government abuse of power.

Flock CEO Garrett Langley has pushed back against the growing concerns about the cameras, saying that people should be worried about their privacy but added that the license plate-reading cameras can be used to promote safety.

“I value my privacy, my family values their privacy, my employees value their privacy, but what we’re talking about is safety as well,” he told Fox News in August. “When people talk about just one of these, privacy or safety, they’re prioritizing the wrong thing.”

“And what we have to prioritize as a country is compromise—when I think about legislation that calls for an outright ban, that’s like banning vehicles,” he said.

The issue has also become a midterm campaign target and has drawn scrutiny in Congress.

In Congress, Sen. Josh Hawley (R-Mo.) said he launched a probe into Flock cameras and demanded that Langley provide his office answers on safeguards to protect Americans’ data.

Earlier this year, Rep. Tim Burchett (R-Tenn.) introduced a measure in the House of Representatives, the “Protection Against Mass Surveillance Act,” that would bar federal agencies from using automated surveillance systems to track, record, and identify people. That includes automated license plate-reading systems like Flock.

Josh Shapiro, the Democratic Pennsylvania governor seeking reelection and considered a potential contender for the White House in 2028, said in late August that he would support a statewide ban. In early September, his Republican opponent, Pennsylvania Treasurer Stacy Garrity, said in a statement, “Flock cameras are an intrusive invasion of privacy and they should be banned.”

Zachary Stieber and The Associated Press contributed to this report.

Tyler Durden Tue, 09/15/2026 - 20:30

Libya Threatens Force Majeure As Oil Guards Shut Fields

By Julianne Geiger, of OilPrice.com

Libya’s National Oil Corporation is threatening to declare force majeure after members of the security force assigned to protect the country’s oil infrastructure shut a pipeline valve and halted production at two fields.

Production has stopped completely at the Hamada and Tahara oilfields and at a pumping station after members of the Petroleum Facilities Guard closed a valve on the main Hamada-Zawiya crude pipeline, NOC said Tuesday.

The shutdown could spread.

The Petroleum Facilities Guard said it would impose partial production cuts for one week at several additional fields, including Wafa, Al-Khamsa and El Feel. A full shutdown would follow if its demands are not met.

The Guard wants to be transferred financially and administratively from Libya’s defense ministry to the National Oil Corporation and has called for a timetable to complete the move.

NOC said it could declare force majeure if the closed valve is not reopened or if similar shutdowns hit other oilfields.

Libya has been here before. Political groups, armed factions and workers have repeatedly used oilfields, pipelines and terminals as leverage since the 2011 uprising that toppled Muammar Gaddafi.

The latest disruption lands just as Libya is trying to push production much higher.

Output has climbed to roughly 1.4 million barrels per day, its highest level in more than a decade. NOC is targeting 1.6 million bpd by the end of 2026 and 2 million bpd by the early 2030s.

Getting there could require $36 billion to $40 billion in foreign investment, according to NOC Chairman Masoud Suleman.

International companies have already started moving back in. Libya signed exploration and production-sharing agreements this year with Repsol, Turkish Petroleum, Eni, QatarEnergy and MOL following its first major licensing round in 17 years. BP, Shell, Exxon and Chevron have also been pursuing a return.

NOC received a $2 billion allocation under Libya’s 2026 budget to support its production plans.

The problem is much older than the investment push: fields capable of producing more oil are still vulnerable to whoever controls the valve.

Tyler Durden Tue, 09/15/2026 - 20:05

Stay-At-Home Subsidies Won't Produce A Baby Boom

Authored by Thomas Savidge via The Daily Economy,

Over Labor Day weekend, amidst Americans' attempts to enjoy the waning days of summer, The New York Times published an article titled "Trump Officials Draft Plan to Pay At-Home Parents, Using Funds for Working Ones." Per the story, the administration's proposal would use funds from the Child Care and Development Fund (CCDF), which subsidizes daycare for working parents, to pay stay-at-home parents for their at-home childcare.

My family could potentially qualify for the payment, but my wife and I understand that this program could jeopardize our children's future. While families may find these cash transfers helpful in the short-term, the cost of these transfers could exacerbate the US's already fiscally unstable situation.

What This Proposal Could Look Like

According to the Times article, the Trump administration is drafting a rule that would let some married households use CCDF funds to support a parent caring for their child at home. The other spouse would have to work at least 35 hours per week, and benefits would still be income-limited. Eligibility and payment terms would depend on final policy.

The CCDF currently funds "center-based childcare providers" (daycares) as well as family childcare providers and in-home childcare, so long as these providers are licensed and meet state and local requirements applicable for professional caregivers. The proposed change would make a qualifying child's own parent eligible to receive the same support.

Outside of these scant details, little is known about the proposal. A similar policy was, however, proposed in a Heritage Foundation report last January. Instead of using CCDF funds, the report proposes a separate Home Childcare Equalization credit. The hypothetical tax credit would add up to $2,000 per eligible child under five to Heritage's proposed Family and Marriage credit. Marriage and earned income would be required, and benefits received through the CCDF (as well as the child and dependent care tax credit) would reduce the proposed credits dollar for dollar.

Heritage estimates that its two credits together would cost about $188.7 billion over ten years, and proposes other spending cuts to offset part of the cost. The new proposal will have its own budget consequences. Redirecting existing funds and creating additional benefits require different fiscal assessments.

Greater Parental Choice, But Minimal Impact On Fertility

Care provided by a parent has an economic cost even when no bill arrives. When one parent stays home, that parent likely gives up earnings as well as career advancement. For most, the trade-off is worthwhile. Interviews of highly educated mothers who choose to be stay-at-home parents to many children found these women "see maternity as a high-risk and high-reward endeavor, an ambitious-but-potentially-thrilling life project." Furthermore, research on mothers' wellbeing strengthens the case for parental choice. A study of more than 2,000 mothers linked better wellbeing to employment arrangements that matched mothers' preferences. A separate longitudinal study found elevated depressive symptoms among unemployed mothers only when they wanted paid work. Offering greater choice for parents among existing funds may provide a silver lining: parents will be better able to pursue the career-family dynamic that best suits their needs and goals.

That silver lining, however, must be taken into context. While not stated explicitly, this CCDF proposal is part of the administration's broader efforts to combat declining birthrates. In May, the White House grouped support for stay-at-home parents with fertility benefits, the Child Tax Credits, and Trump Accounts. An IVF announcement last February explicitly cited declining fertility and the goal of "more babies and expanding American families." That broader demographic ambition makes the likely impact on fertility relevant, even if the forthcoming CCDF proposal does not mention it.

Claims that this change (or other fiscal stimulus programs) can usher in a baby boom deserve skepticism. An OECD review finds that cash benefits and tax incentives generally produce modest, sometimes temporary fertility increases. As my colleague Jeff Degner and I noted last January, the Heritage report rightfully admits: "While other nations have tried to reverse declining birthrates through financially generous family policies, none has succeeded in restoring fertility to replacement levels. This demonstrates that government spending alone does not ensure demographic success."

The evidence does not establish whether this proposal would increase fertility. Even if it did produce a temporary increase in births, that could partly reflect families having children sooner without increasing their eventual family size.

Greater choice can be assessed on its own merits; lawmakers should not count on a large fertility response to justify the expense.

The Best Inheritance? Fiscal Discipline And Prosperity

Broader eligibility does not automatically require more federal spending, but, with a fixed budget, more applicants could mean greater competition for smaller benefits. Families excluded from parental care payments could press for inclusion, while existing recipients seek protection from funding reductions. Lawmakers often find it easier to increase spending than to choose among competing claims.

Funding decisions about this proposal take place against a federal debt burden that has already passed $40 trillion. In its February outlook, the Congressional Budget Office projected that debt held by the public would rise from 101 percent of gross domestic product in 2026 to 120 percent by 2036. Existing commitments already put borrowing costs on an unsustainable path.

Persistent borrowing can absorb savings that would otherwise finance private investment, weakening the growth that supports future wages. CBO's analysis of delayed debt stabilization finds that waiting to adjust increases the eventual shock and imposes greater burdens on younger generations. Those consequences belong in any discussion of helping children.

What really matters for family stability is sustained spending restraint that reduces deficits and makes room for lasting tax relief. Parents, my wife and I included, could keep more of what we earn and decide how to use it. Fiscal discipline must accompany the promises of lower taxes. Additionally, tackling inflation, the most corrosive anti-family force of all, can help make life more affordable.

Any CCDF reform should explain its funding limit and provide a workable transition for current recipients. Those standards should apply to the benefits my household may receive as firmly as to programs serving other Americans.

My wife and I would rather Washington make difficult spending choices while we can help bear the adjustment. Our children will live with the consequences of our choices now long after any parental care payments end. Lasting prosperity is the inheritance most worthy of preserving.

Tyler Durden Tue, 09/15/2026 - 19:15

Largest US Power Grid Faces Dire Crisis By 2030 If Data Center Load Growth Continues

By 2030, the PJM Interconnection, the largest US electrical grid in the US serving 67 million people in 13 northeast states, is likely to face a “loss of load expectation,” or LOLE -  a key reliability metric used by power system planners to measure the expected number of hours or days per year that a power grid's electricity generation will fail to meet customer demand - between six and 100 times worse than the grid operator’s planning criterion, mainly due to the addition of large-load data centers, according to a study commissioned by the Pennsylvania Public Utility Commission.

The PUC and the firms that produced the report - Synapse Energy Economics, Mondre Energy and Aspen Technologies - characterized it as an independent analysis aimed at developing load projections and evaluating resource adequacy under a set of likely possible futures, according to UtillityDive.

In models covering 2027 through 2030, both a reference scenario and a high-load, low-supply scenario show PJM’s planning criteria for resource adequacy not being met. Only under a scenario with no new data centers is the region able to meet PJM’s target LOLE of 0.1, the report said.

PJM’s standard is designed to limit potential electricity shortages “to approximately one event every 10 years,” said a PUC release about the report. 

In the study’s reference scenario, which relies on PJM’s 2026 load forecast, the modeled 2030 LOLE is 0.59, “or nearly six times worse than the PJM planning criterion,” it said.

In a “worst-case future” of higher-than-expected load additions and constrained resource deployment, the modeled LOLE is 13.20 — “over 100 times worse than PJM’s planning criterion,” indicating an expectation of “more than 13 days with loss of load events per year.”

“As in the Reference scenario, these reliability issues are largely due to surging data center additions,” the study said.

“This analysis sends a clear warning: electricity demand and supply are moving out of balance, and the status quo is not sustainable,” PUC Chairman Steve DeFrank said in a statement. “We need urgent action at PJM and a broader Pennsylvania energy strategy that makes sure our supply of electricity keeps pace with demand.”

PJM, in a statement to CBS affiliate WJAC, acknowledged that new data center loads are growing faster than supply.

“PJM has taken a number of actions to both increase electricity supply and manage new demand in line with the Ratepayer Protection Pledge taken by data center developers to shield residential customers and other ratepayers from bearing reliability risks or cost increases associated with data center development,” said Jeff Shields, PJM’s senior manager of external communications.

The reference scenario anticipates Pennsylvania remaining a net energy exporter, but sees its exports “decrease from about 91 TWh in 2025 to about 69 TWh by 2035 and 38 TWh by 2040,” the report said.

In the high-load, low-supply scenario, Pennsylvania becomes a net importer of 5 TWh by 2040. 

An aerial view of the construction of an Amazon Web Services data center on Aug. 26, 2026, in Sterling, Va, located in the PJM Interconnection, the largest grid in the U.S. and an epicenter of data center construction

“Because this scenario has a large amount of unmet load in 2031 and later years, it is likely that some amount of this 2035 and 2040 load will be unmet, as there will not be enough regional generation to meet PJM-wide load requirements,” the report says.

Last month, Pennsylvania Gov. Josh Shapiro, D, issued an executive order that the state will offer preferential permitting to data center projects with peak demand of more than 25 MW if they commit to certain requirements, including sourcing their electricity from new power supplies.

The PUC also voted unanimously Thursday to approve two motions concerning data center development and ratemaking. One of the motions directs PUC staff to propose updates to the state’s rules for emergency curtailment, and to organize a technical conference on cost allocation for data centers.

The report notes that PJM and the U.S. Department of Energy “have implemented several initiatives, policies, and programs to address growing concerns about PJM’s resource adequacy,” including interconnection queue reform and reliability backstop procurement. 

“PJM and its stakeholders are also currently discussing additional initiatives such as load forecasting improvements,” the report said. “DOE has also committed to keeping some coal-fired power plants online beyond their retirement date, in an effort to maintain resource supply in the region.”

Tyler Durden Tue, 09/15/2026 - 18:50

Board Votes To Shut Down Kennedy Center

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

The board of the Kennedy Center voted Sept. 15 to close the arts facility “immediately” for safety reasons so rehabilitation work may be performed on the building, President Donald Trump said.

Workers outside The John F. Kennedy Memorial Center for the Performing Arts in Washingotn after they updated the signage in honor of President Donald Trump on Dec. 19, 2025. Jim Watson/AFP via Getty Images

Trump made the announcement on Truth Social hours after a federal judge blocked the board from putting Trump’s name on the building’s facade or renaming its grounds in his honor.

U.S. District Judge Christopher R. Cooper ruled that the plan to add inscriptions honoring the current president would violate an existing injunction and the 1964 law that made the cultural center a memorial to the late President John F. Kennedy, which only Congress may alter.

The judge said that in 1983, Congress amended the 1964 law to ensure that “no additional memorials or plaques in the nature of memorials shall be designated or installed in the public areas of the John F. Kennedy Center for the Performing Arts.”

Trump said the U.S. Department of Justice is seeking an expedited appeal of Cooper’s new ruling.

He said the closing of the center would happen “immediately,” but the rehabilitation project, which he described as “a very large and complex job,” cannot get underway until the U.S. Court of Appeals for the District of Columbia Circuit issues a ruling “on the Board’s approved name.”

Tyler Durden Tue, 09/15/2026 - 18:25

Dollar General CEO Warns Even "Upper-Middle Acting Like Lower-Income" Amid Fuel Crisis

Speaking at Goldman Sachs' 33rd Annual Global Retailing Conference on Tuesday morning, Dollar General CEO Todd Vasos offered a downbeat assessment of its customer base, warning that financial stress is spreading up the income ladder to middle- and upper-middle-income households. 

Years of elevated prices for everyday goods, compounded by gasoline prices above $4 a gallon nationally and $6 a gallon for diesel, are certaintly reshaping consumer habits across income cohorts. Vasos said that even customers earning $100,000 or more, whom Dollar General classifies as higher income, are increasingly under stress. 

Vasos explained:

And we've always said here at Dollar General for our core customer that any time that gas prices get anywhere close to four and then crests $4 a gallon, the customer changes their their shopping behavior, stays closer to home normally shops more often, but buys less on each occasion.

And that's exactly what the core customer is faring. But the interesting thing with this economy, because of the other sustained headwinds of inflation over the years that have passed, even that middle to upper middle is acting more like a lower income shopper these days. And they had that same characteristic. And then high income for us is that that $100,000 plus crowd.

The CEO of Dollar General, which has more than 21,000 stores nationwide, offers a real-time snapshot of consumer spending patterns and sentiment.

On Monday, Jefferies food analyst Scott Marks also flagged new pressure on convenience store customers as gasoline and diesel prices soared in August.

All of this highlights the Trump administration's urgent search for energy price relief ahead of the midterms. Export restrictions on diesel entered the conversation earlier today with Senate Majority Leader John Thune. The administration is also considering measures to increase U.S. refining capacity (yet capacity is at 98%). Whether Trump officials will suspend federal fuel taxes remains to be seen.

Tyler Durden Tue, 09/15/2026 - 18:00