Economy

The Federal Reserve's August G.17 release shows total industrial production held flat at an index of 103.1, while manufacturing output dropped 0.3% to 98.2, ending a seven-month streak of increases. The decline was broad-based across durable goods categories, with capacity utilization in manufacturing slipping to 75.7%, now 2.5 percentage points below its long-run average. Regional Fed surveys from the same period present a mixed picture, with Dallas, Philadelphia, and Kansas City reporting expansion while Richmond showed little change, leaving the national dip without a single identifiable cause.

The 10-year Treasury yield crossed 5% on September 15 and reached 5.01% on September 16, one day before the FOMC raised the federal-funds rate to 3¾%–4%, meaning the move was driven by broader market conditions rather than the rate decision itself. Fed Chair Kevin Warsh cited a strengthening economy, capital competition from hyperscalers, and geopolitical factors as contributors to the rise in longer-term yields. The yield increase transmitted into mortgage markets, with the average 30-year fixed rate climbing to 6.95% by September 17, while investment-grade corporate spreads held steady at 0.78%.

The U.S. national average diesel price reached $6.4866 per gallon on September 19, 2026, the highest AAA has ever recorded, while gasoline rose to $4.4759 but remains below its 2022 peak. Gulf oil exports have fallen to roughly half their pre-war levels, with refined product and LPG exports nearly 60 percent below February figures, contributing materially to the price increases alongside domestic refinery conditions and inventory levels. Diesel is now 65 percent above its pre-conflict price from late February, and 68 percent above the same week one year ago.