Annotation by Luis Ortega on FOMC Press Conference, September 16, 2026

Schrödinger's Strait, just before Owen's window. It doesn't have to close for insurance and tanker rates to climb.

@owenprice I read your clip the other way. A second chokepoint under threat is a bigger supply shock, not demand running hot, and the textbook move with a supply shock is to look through it. Goldman's economists called the case for a hike 'weak' going in. A hike can't restart a refinery. It does push up prime while we wait for the war to end, and a lot of the construction loans that get apartments built float off prime.

“Goldman Sachs economists suggested in a note to clients this week that the case for a rate hike was “weak,” based on the state of the US economy. They argued the economy wasn’t overheating, demand wasn’t excessive, and the supply shocks fueling inflation – namely high oil and fuel prices – would correct themselves once the war ended.”

CThe Fed was bullied into hiking rates. Now it hopes it didn't royally screw upcnn.com

@luisortega your loop needs wages chasing prices, and on NBC's meeting-day numbers wages are losing that race, 3.1 against 3.4. That's one reading of two averages, so your crew could look different. I'd want six months of both on one chart before I called it a spiral.

“Those energy prices have helped push inflation up to 3.4% as of August, above average U.S. wage growth of 3.1%.”

NFed raises interest rates for first time since 2023, defying Trump as inflation mountsnbcnews.com

@elliebrennan yeah, that one landed. If wages are already behind, the hike asks my crew to wait even longer to catch up, and my take skipped right over that. @priyavenkat here's where I'm still stuck though. He said up top that inflation has been over target for more than five years. How long do you look through something before it's just what things cost?

@priyavenkat prime, sure, and that part is fast: AP says within a month, and most credit cards ride on it. Mortgages mostly don't. They track the 10-year, which topped 5% the Monday before the meeting, and the 30-year fixed was already at a 14-month high the week before the hike.

“Mortgage rates don't necessarily follow what the Fed does. At least not directly. They tend to track the yield on 10-year Treasury notes instead. Unfortunately for home shoppers, 10-year yields have been surging.”

PWhat the Fed rate hike likely means for youpbs.org

@rachelkim the Darden explainer has the part that sounds backwards. If the Fed looks willing to stay tight, long yields could come down even while short rates go up, which would be the Fed's route to cheaper mortgages. Day one didn't cooperate: NBC had the 10-year dipping earlier in the day and back near its highest since 2007 by 4 p.m.

““If the Fed demonstrates that it is willing to keep policy more restrictive for as long as necessary, it could restore its credibility as an inflation fighter,” he says. “That could cause long-term yields to fall relatively quickly, even if short-term rates initially rise further.””

NWhat the Fed Rate Hike Means for Borrowers and Investorsnews.darden.virginia.edu

this is where the take loses me. if the Fed can't touch oil, what's left for it to squeeze except hiring? a bakery with 11 people on payroll is exactly the 'labor market' in Pearce's last sentence, Luis. (side note: NBC has Warsh naming competition for capital from AI companies as one of his three reasons yields are up. my industry keeps turning up in other people's interest rates)

““The Fed cannot control energy prices,” said Michael Pearce, chief US economist at Oxford Economics. “The economy is solid and can withstand a few rate hikes, but the risk is higher interest rates begin to weaken the labor market.””

CThe Fed was bullied into hiking rates. Now it hopes it didn't royally screw upcnn.com

@devmalhotra he got almost exactly that as the last question of the day, and his answer was that he doesn't think it takes hurting the job market. Oxford says that's the risk. I can't tell you who's right. I can tell you I've put off hiring a twelfth person until I find out, which I guess is your point.