In 30 seconds: The Iran War has driven Brent crude above $100/barrel and US 10-year Treasury yields to their highest levels since 2023, triggering a global bond selloff, surging European gas prices, and rising mortgage rates. President Trump proposed issuing a $5,000 dividend check to every adult American citizen contingent on Republicans winning Congress, a plan estimated to cost $1.2 trillion that critics say is legally dubious and fiscally reckless. August US PPI came in mixed—headline matching estimates at +5.4% year-over-year while core was softer—fueling debate over whether the Fed will hike rates in September, with markets closely watching the upcoming CPI and PCE data. The ECB raised its deposit rate by 25 basis points to 2.5%—its second hike since the Iran War triggered a new energy shock—with inflation now projected to remain above the 2% target well into 2028.
Brent crude hit $104 per barrel this morning, and WTI has joined Brent in trading above $100 a barrel, with crude rising 8 consecutive days. Oil jumped 6% on the session. The US Strategic Petroleum Reserve now sits at 286 million barrels, its lowest since the early 1980s, down from 415 million at the start of March. The bond selloff is global. 10-year Treasury yields up 11 bps today. Treasury had to move $22 billion in 30-year bonds into that headwind. UK 10-year gilt yields touched 5.40%, ahead of the UK government delivering its first highly anticipated budget on October 28. The French government bond spread widened above 90 basis points, a level not seen since the European debt crisis. The spread between US and China 10-year bond yields hit a record 3.17 percentage points. Europe's benchmark gas futures climbed to €80 per megawatt-hour, their highest since the initial trading day of 2023. The ECB raised its deposit rate by 25bps to 2.5%, its second hike since the Iran war triggered a new energy shock. Stateside, the average 30-year US mortgage rate breached 7%. US gas prices have surged 44% since the war began, reaching $4.28/gallon. US equities, remarkably, fell under 1%. Despite oil surging 6% and 10-year Treasury yields jumping 11 bps on the day, US equities held up — a sign of the resilience that impressive corporate earnings have provided as vital insulation for the stock market.
The arithmetic is straightforward. There are roughly 245 million adult citizens. Multiply that by the per-person amount and you get roughly $1.2 to $1.3 trillion in total cost. That is a large number. "There's even under consideration a new concept where we give 20 percent of the DOGE savings to American citizens. I think it's a great idea. It could be a lot." That plan at least gestured at a funding source, however speculative. The new version dispenses with even that pretense. Critics have not been shy. One analyst called the whole thing a debt-financed bribe. There is also the small matter of the administration's own 3% of GDP deficit target. Adding $1.2 trillion in new spending to the ledger does not, as a general matter, help you hit a deficit target. But perhaps the dividend is best understood not as fiscal policy but as a campaign promise with a built-in escape clause: the condition that will almost certainly never be met.
Initial jobless claims for the week ending 2026-09-05 came in at 206,000, ticking down from 207,000 the prior week. A 0.48% decline is not exactly dramatic, but the level remains low. The 10-Year Treasury Yield closed at 4.94% on 2026-09-10, jumping 11 bps on the day.
ECB hiked rates. ECB hiked rates. You might think a central banker describing a rate hike as self-evident is meant to project confidence. It is also, if you think about it, a way of telling markets not to bother parsing the vote split, because the inflation picture is doing all the talking for her. And the inflation picture is not great. The staff projections put headline inflation at 3% in 2026, with core inflation forecast at 2.5% over the same horizon. Both were revised higher by 0.1pt for the 2026-27 period. On the growth side, the staff sees GDP at 0.9% in 2026, revised up by 0.2pt for 2026-27. So Europe is not collapsing, just growing slowly while prices run hot. The classic uncomfortable middle ground where you cannot stop hiking but you also cannot hike aggressively without breaking something. Markets are already pricing three more quarter-point hikes by October 2027. Inflation is now seen staying above the 2% target well into 2028.
Here is what it costs to borrow money right now.
30-year fixed mortgage: 6.76%, up 5 bp on the week
15-year fixed mortgage: 6.09%, up 0.83% on the week
Auto loan rate (60-month): 7.14%, down 5.18% on the quarter
Credit card rate: 20.94%, down 0.29% on the quarter
Prime rate: 6.75%, flat on the day