Inflation Rises Again

October 15, 2026

The International Monetary Fund has just warned, as I’ve been saying, that the disorderly rapid rise of interest rates on sovereign bonds is creating serious global financial risks. That rise in bond rates all over the world is being caused by the combination of out-of-control government debt spending due to maniacal policies like Big Beautiful Bill and by the inflation that is being caused throughout the world from the Trump Tariffs (and all retaliatory tariffs nations have raised in response) and Trump’s War with Iran.

Rising bond yields have been a warning sign for financial markets in recent months amid the Iran war’s risk to global economies, and the IMF says those risks are becoming more of a concern.

Of course, you know that here I am predicting the US bond market will bust (as will other bond markets in the world) and that when it does it will take out what is left of the wobbly stock market, which is all nonsense right now with no underpinnings because even the AI “earnings” are just a mirage created by the speculative soaring of tech stocks, which are the last seven survivors inside the stock casino. That all comes down as rising bond interest makes financing those continued purchases by AI companies of each other’s stocks too expensive to continue. That’s when the Ponzi that reports stock gains as earnings ends for lack of another round of suckers. It’s a game of musical chairs. Don’t be the one too slow to sit down and get out of the buying frenzy. (See: “THE DEEPER DIVE: An Enormous Triple Bubble Bust Has Begun.”)

The rising interest on bonds translates into rising interest of home mortgages, which are largely priced off the US10YR Treasury. That leaves housing locked outside of affordability. The only way the Big Bond Bust won’t wipe out the stock market and the thin trickle that is left of a functioning housing market is if wobbly stocks and the thin trickle fail on their own first, beating bonds to the finish line of destruction—an order of events that is not at all unlikely.

False inflation truly rising

News on the inflation front, turned the heat up a little more as headline inflation came in slightly hotter than had been expected. The Fed recently reported that all rising inflation so far has been due to tariffs pricing through to consumers (other than the rise in energy costs). So, just wait until the rise in fuel costs and related energy costs and product ingredients made from oil price into everything else. Wait until the actual fuel and food shortages start to appear—likely this year for fuel and next year for food—accelerating the rise in prices.

In fact, most of the rise in headline CPI was due to the rise in the cost of fuel, not as much the rise in the price of everything else:

US consumer inflation was hotter than anticipated in September, government data showed Wednesday, as Washington’s continued war with Tehran pushed energy costs higher, deepening strains on American households ahead of next month’s midterm elections….

The consumer price index (CPI) rose 3.7 percent year-on-year in September, the Department of Labor said, more than the 3.6 percent forecasted by analysts according to MarketWatch.

This was a notable acceleration from 3.4 percent in August…

Inflation picked up pace on a month-on-month basis too, accelerating from 0.4 percent in August to 0.6 percent last month.

Gasoline costs accounted for more than half of the monthly CPI jump, surging 9.1 percent in September….

Yields on US government bonds spiked after the inflation report. The 10-year Treasury yield, which influences rates on mortgage and auto loans, rose to 5.3 percent from 5.2 percent. But it has since moderated.

“Energy lit the match; sticky services, shelter and goods prices kept the fire burning,” said KPMG’s Swonk of the inflation report….

“Airfares, used cars and recreation all had big price jumps,” she added. “Americans are seeing their pay totally wiped out by inflation. That’s been the case for half a year now.”

The federal government doesn't much care about the impact on you, though. Social Security benefits were announced as getting a 3.6% cost-of-living adjustment (COLA). Now, that may sound like it is a close match to inflation, but you have to bear in mind that it is a loss of buying power because because the true inflation you experience is considerably greater than what the government reports in CPI and PCE.

(That is why when people falsely say this is a strong economy, I have to remind everyone that “real GDP growth” is not real at all. It, too, takes out much less inflation than is true. Even “real GDP” is partially just measuring inflation in prices and not a true increase in production.)

Having explained the falsehoods of government inflation reports many times, I won’t go into it again now; but you can go to Shadowstats.com to learn from John Williams about it. As a result, you lose over time because SS benefits are adjusted by the government’s claimed inflation rate. On top of that, the government uses averaged inflation from the months of July-September, which tend to run below the annual average for inflation; AND ON TOP OF THAT it uses those months from the prior year, not the present. So, the COLA lands with a huge lag to current inflation—all to the government’s benefit.

Tragedy in Iran

Also in the news to which I want to call attention: A beautiful, young Iranian woman—just 23 years old—was arrested violently and has been sentenced to death by the Iranian court system for allegedly insulting the prophet Mohamed on social media. What a tragedy. She is a college student, majoring in accounting in Iran. Her family spends every day mourning the fate of their beautiful daughter who was full of hope and promise.