A Brutal Inflation Report

Financial FAQs

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent on a seasonally adjusted basis in September after rising 0.4 percent in August, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.7 percent before seasonal.” BLS.gov

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The misjudgments and ignorance of our wanne-be dictator who likes wars is coming home to roost. Consumers are being hit with the second-largest monthly inflation spike since Trump began to bomb Iran (see graph), which makes it inevitable that there will be more interest rate hikes by the Federal Reserve.

This is largely because of the shortage of oil and energy supplies as Iran has been knocking out Middle East oil wells and refineries while closing the Strait.

The Bureau of Labor Statistics reported the gasoline index rose 9.1 percent in September, accounting for over half of the monthly all items increase. The energy index increased 5.2 percent over the month following a 2.1-percent increase in August.

But it hasn’t yet stopped consumers from shopping. Advance estimates of U.S. retail and food services sales for September 2026 not for inflation were up 0.8 percent (±0.4 percent) from the previous month, and up 6.3 percent (±0.5 percent) from September 2025.

Yet much of it was spent on soaring gas prices, or diesel prices which are approximately one dollar higher per gallon than gasoline.

That’s because we are in the middle of the A.I. investment boom that will keep the financial markets at record levels and the economy growing into next year. But everything will be more expensive.

Trump claims his war is to prevent Iran from ever having nuclear weapons. But President Obama had already accomplished it with his Joint Comprehensive Plan of Action (JCPOA) in 2015 in which Iran signed a treaty with the major world powers to never develop a nuclear weapon,

Trump cancelled the treaty that would have kept the Middle East at peace because of his hate for a Black President, so now the Strait of Hormuz is closed and petroleum supplies will be more expensive and more difficult to obtain when it ultimately reopens because Iran controls the access.

There was never a mention of the Strait of Hormuz in Obama’s Treaty because it was an international waterway.

So what happens next? If the A.I. construction continues and consumers keep shopping, we will have decent economic growth. The Atlanta Fed’s GDPNow third quarter GDP estimate is holding at 3.6 percent, up from 2.2 percent in Q2.

And inflation will continue to rise. Wholesale prices that go into consumers prices also took a huge jump of 1.3 percent in September. And that is for the raw materials like steel, lumber, etc., that go into retail products. So, prices will keep rising.

Our Federal Reserve must therefore continue to raise their interest rates to maintain credibility. Their Fed Funds rate controls short term interest rates for credit cards and installment loans, which controls the Wall Street Prime Rate, which is already 7 percent.

It hasn’t slowed down consumers yet because of the chain of events I just mentioned. The stock market is profiting from the A.I. construction and record profits of corporations. But they must slow their shopping eventually, maybe after the holidays when they run out of savings.

The A.I. centers will be taking much of the energy supplies when they open. The Atomic Energy Agency (AEI) estimates that a “typical AI-focused data centre consumes as much electricity as 100,000 households, but the largest one is under construction today will consume 20 times as much.”

I have an interesting thought. Trump could bring inflation back down to earth if he wasn’t so in love with Putin by taking The Ukraine’s side in that war. If Ukraine was given the full support with weapons and intelligence of our “great military”, Russia would have to sue for peace, as the saying goes.

And what then? It could no longer support Iran, who might then also sue for peace. Image what could happen next. Sanctions could be lowered or even eliminated, and world trade could begin to return to normal times.

But is Trump too crazy in love with himself for that to happen? Then remove him and save the world from another brutal recession.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen