Edward Meir's week in review and thoughts for the week of Sept 21, 2026

Not surprisingly, crude oil prices shot up late Friday and going into Monday’s session as well, with Brent values shooting up to nearly $110/barrel on both days. However, prices began to slip for the balance of the week, with Brent ending at just under $104/barrel. The decline was mainly attributable to the fact that there was little “new news” following the weekend attacks. Although the East-West pipeline outage remained in place, markets were reassured somewhat after the Saudis said they plan to step up their exports through Omani pipelines.

US inventory numbers also moderated the crude price advance, especially in WTI. Last Tuesday, the American Petroleum Institute reported crude stocks rose by 7.1 million barrels in the latest week, with unexpected increases in both gasoline and diesel inventories as well. For its part, the EIA reported crude inventories fell by 640,000 tons, but this was better than the 1.6 million draw forecast. More importantly, there were weekly inventory increases in both gasoline (up by about 794,000 barrels) and in distillates (up by 1.6 million barrels), with both beating consensus forecasts calling for draws. The US energy trade balance also remained constructive; crude imports fell by almost 1.2 million bpd last week, while exports rose by 1.4 million bpd.

Base metals

In base metals, we saw a stronger showing this past week. Copper and nickel were each up by almost 2% on the week, while aluminum and zinc tacked on about 1% each as well. Lead was up by 1.5%, while tin was about 0.5% higher. In copper’s case, Reuters reports the Yangshan copper premium — a gauge of Chinese demand for imported copper — climbed to $124/ton, a four-year high. The Chinese market — and to a lesser degree Europe and other countries in Asia — find themselves competing for copper as uncertainty about a looming cathode tariff decision is attracting massive quantities of copper into North America. Given the price rally we saw in base metals last week, many of the base metal spreads, particularly those for copper, aluminum and zinc, all returned to backwardation as well.

Precious metals

Gold had its first up week in the last four (gaining 1% on the week) as lower oil prices eased concerns about prolonged inflationary pressures. (That could change this week given weekend developments in the Gulf.) Silver, platinum and palladium all posted weekly gains as well. In the ferrous markets, US HRC steel prices continue to push higher, hitting four-year highs this past week.

The Federal Reserve

This past week, we also had the Federal Reserve policy statement and Fed Chairman Kevin Warsh’s news conference. As our readers are aware, the central bank approved a ¼ of a point hike in the federal funds rate, as was widely expected. Investors then waited for more “color” from Warsh but were treated to an unusually short press conference that lasted less than half an hour. In fact, most of Warsh’s answers clocked in anywhere between 15 seconds to under two minutes. No matter, his comments were not received well.

US treasuries had a poor finish to the week as well. The 2-year note yield settled up ten basis points on the week to 4.74% while the 10-year note yield ended up two basis, at 5.00%. The week-over-week decline in crude oil prices likely helped temper the rate advance.

Warsh said the central bank wanted to observe underlying trends in the economy, which is why it made no change to rates at its July meeting. But since then, Warsh pointed out the inflation numbers are getting worse, hence the quarter-point rate increase. The rate hike, Warsh noted, should be viewed as removing “a dose of accommodation” as part of a longer-term effort to get to the Fed’s cherished 2% inflation target. While getting to 2% is no doubt Walsh’s holy grail, his determination to get there is being undermined by the Fed’s own forecasts. In this regard, Fed projections have 2026 PCE inflation increasing by 10 basis points in 2026 to 3.7% (from 3.6%).

Moreover, Fed governors also have inflation returning to 2% in 2029, suggesting that more hikes are inevitable. So, what is the Fed’s game plan until then? As Warsh himself admitted, the inflation we are seeing can be attributed to three variables: robust growth in the economy, competition for funds arising from the AI sector and geopolitical risks. The latter two are outside of the Fed’s control.

Macro readings and other news from the past week

• US retail sales rose 1.2% m/m in August, above the 0.8% expected and were up 6.0% year over year (y/y). July was revised slightly higher to a 0.5% decline. Nonstore sales increased 2.6%, electronics and appliance stores rose 1.6% and restaurants and bar sales gained 1.2%. Building-material and garden-equipment sales slipped 0.2%.
• In the US housing market, overall starts fell 2.6% in August to a 1.275 million annual rate. Starts in buildings with five or more units dropped 22.5% to 344,000, while single-family starts rebounded 7.6% to 918,000. Single-family permits slipped 1.8% to 878,000. Separately, we had reports that builder confidence fell three points to 32 in September, its lowest level in a year, while pending home sales edged up 0.3% month over month (m/m) but remained 4.7% below year-earlier levels.
• US factory output fell 0.3% in August after seven consecutive monthly increases, while August industrial production was flat versus the 0.3% gain expected. Among the IP components, mining production edged up 0.1% last month, utilities production was up by 1.8%, while general manufacturing was off by 0.3%.
• US import prices increased 0.7% in August, reversing July’s 0.3% decline, and were 7.0% higher y/y, the strongest annual increase since August 2022. The monthly rise came mainly from non-fuel imports, while imported fuel prices moved lower.
• The Empire State manufacturing index fell to 7.6 in September from 20.6 in August. New orders edged higher while delivery times lengthened. Input pricing pressures rose as well, no surprise here.
• Out of China, we learned that industrial output grew 5.2% from a year earlier in August, quickening from the 4.5% increase seen in July. However, retail sales rose by 0.4%, slowing from a 0.6% gain in July and came in well short of estimates. Fixed-asset investment declined 7.2% in the first eight months compared with a 6.7% drop through July. Most disturbing is the fact that there is no light at the end of the tunnel for the beleaguered property sector. Investment in property dropped 19.9% in the first eight months of the year compared to 2025 and came in worse than the 19.2% decline seen in January-July. Property sales by floor area declined by 12.1% after an 11.8% drop in the first seven months, while new construction starts fell by nearly 25% versus a 24.0% decline in the January-to-July period.
• UK inflation accelerated to 3.1% y/y in August from 2.9%, with motor fuels making the largest upward contribution. The Bank of England held its bank rate at 3.75%, but the vote was 6-3, with three members favoring an increase to 4%. Separately, August retail-sales volumes rose .5% after falling .5% in July.
• Reuters reports Commercial Metals is planning to enlarge its Jacksonville, Fla., rebar operation by 35 acres. A source said the additional capacity should improve supply but is unlikely to materially affect the immediate pricing picture.
• Generac and Amazon signed a long-term agreement on backup generators for Amazon data centers. Initial deliveries are expected to total about $2.4 billion in 2027-28.

This week’s US macro readings

It should be a slow week on the US macro front.

• Monday and Tuesday, no reports come out on.
• Wednesday we get the preliminary S&P Global manufacturing and service PMIs, both expected in the mid-50s and in expansion mode.
• Thursday brings us weekly jobless claims (expected at 204,000, last 196,000), followed by August new home sales (expected at 620,000, last 607,000).
• Friday brings us August durable goods (expected at -0.3%, last 1.1%), followed by the University of Michigan final consumer survey reading for September (expected at 47.1, last 51.7). As an aside, the Atlanta Fed’s GDPNow forecast for Q3 is now at a sizzling 5.1%. We will see if this projection pans out by the time the number comes out in October.

We wish all our readers well for the upcoming week.