IGA Weekly Macros Sept 1 2026
Equities Snap Losing Streak: Stocks closed higher on the week, led by the Nasdaq (+0.9%) and S&P 500 (+0.5%), while the Dow Jones posted its first positive week in three.
Energy Market Relief: Brent crude settled below $86/bbl as Gulf oil exports recovered to 15–16 million barrels per day (~two-thirds of pre-war levels) following interim maritime negotiations between Iran and Oman.
Yield Curve Flattening: Long-end Treasury yields eased mid-week behind expanded Treasury buybacks, but 2-year yields surged nearly 12 bps following Fed Chair Kevin Warsh's Jackson Hole keynote.
Hawkish Fed Pivot: Markets now price a 57.1% probability of a 25 bps rate hike at the September 16 FOMC meeting, up from 35% prior to Jackson Hole.
Executive Summary & Equity Markets
The week opened with energy markets dictating risk sentiment. Brent crude settled back below $86/bbl as Iran and Oman negotiated an "interim framework" for a temporary maritime corridor and mine-clearance project in the Strait of Hormuz. Goldman Sachs estimates Gulf oil exports recovered to 15–16 million barrels per day—roughly two-thirds of pre-war levels—with Kuwait and Qatar returning to approximately 70% of pre-conflict volume.
The oil-driven yield relief supported equities early in the week. Nvidia reported quarterly revenue of $96BN (more than double year-over-year) and projected growth near 70% two years out. Its stock jumped almost 9%, driving the broader market's strongest single-day rally of the month. By Friday, however, equity gains pared as rising borrowing costs raised concerns regarding data center financing costs.
Market Performance Summary (as of August 31, 2026):
S&P 500: 7,712.00 (+0.5% WoW | +1.5% 1Mo | +18.8% 1Yr)
Dow Jones Industrial: 53,560.00 (+0.8% WoW | +5.2% 1Mo | +17.5% 1Yr)
Nasdaq Composite: 26,402.00 (+0.9% WoW | -2.3% 1Mo | +22.1% 1Yr)
Gold (Spot): $4,451.00 (-2.9% WoW | +30.2% 1Yr)
Silver (Spot): $67.12 (+13.8% 1Mo | +72.0% 1Yr)
Crude Oil (WTI): $86.25 (+2.6% 1Mo | +38.0% 1Yr)
CBOE VIX Index: 15.23 (-9.5% 1Mo | -2.8% 2Yr)
Macroeconomic prints delivered mixed signals: July Core PCE rose 3.7% year-over-year, coming in slightly above expectations. Initial jobless claims remained subdued at 203k, but consumer confidence slid as retail gasoline prices ticked higher. With no CPI or PCE data scheduled before mid-September, equities are navigating a window where policy expectations are repricing faster than fundamental data releases.
Treasury Yields & Debt Capital Markets
Treasury yields were pulled from both ends of the curve, narrowing the gap between short-term and long-term benchmark rates by nearly 20 bps.
U.S. Treasury Benchmark Yields & Spreads (as of August 31, 2026):
1-Month T-Bill: 3.74% (+5 bps 1Mo | -58 bps 1Yr)
2-Year Treasury: 4.348% (+12 bps WoW)
5-Year Treasury: 4.47% (-1 bps 1Mo | +28 bps 3Mo)
7-Year Treasury: 4.59% (-1 bps 1Mo | +28 bps 3Mo)
10-Year Treasury: 4.72% (-1 bps 1Mo | +49 bps 1Yr)
30-Year Treasury: 5.22% (-1 bps 1Mo | +37 bps YTD)
2s/10s Yield Spread: +0.40% (-31 bps vs. Jan 5, 2026: 0.71%)
5s/30s Yield Spread: +0.75% (-39 bps vs. Jan 5, 2026: 1.14%)
10-Year SOFR Swap Rate: 4.34% (+30 bps 1Mo)
Midweek reports indicated Treasury could tap its $1TN Treasury General Account (TGA) to backstop expanded bond buybacks in the 10-to-30 year sector. The 10-year yield dropped 7 bps in a single session to 4.625%, and the 30-year yield touched a mid-week low of 5.17%.
However, Friday's Jackson Hole keynote reversed short-end yields. The 2-year yield surged nearly 12 bps to 4.348%—marking the largest single-day rise following a Jackson Hole address since 1996. The 30-year yield finished the week at 5.21%. In an op-ed published prior to the keynote, Stanley Druckenmiller characterized Treasury buybacks as "price management" that reallocates rather than eliminates federal debt funding needs, shifting obligations toward shorter maturities that roll over faster.
10-Year U.S. Treasury Yield Analyst Forecasts (Bloomberg Survey):
Q3 2026 Forecast: Weighted Avg: 4.57% | Median: 4.57% (High: 4.90% | Low: 4.20%)
Q4 2026 Forecast: Weighted Avg: 4.50% | Median: 4.50% (High: 4.95% | Low: 4.00%)
Q4 2027 Forecast: Weighted Avg: 4.36% | Median: 4.35% (High: 5.00% | Low: 3.66%)
Federal Reserve Policy & Monetary Expectations
In his inaugural Jackson Hole address, Fed Chair Kevin Warsh noted that inflation has remained above the Fed's 2% target for over five years, with roughly half of the items in the Fed's inflation basket currently rising faster than 3% (compared to one-third pre-pandemic). Warsh stated that current policy conditions are not yet restrictive enough and warned that "we have work to do" if inflation trends do not improve.
FOMC Implied Rate Path & Rate Target Probabilities:
Implied Effective Overnight Rate: 3.631%
Sep 16, 2026 Meeting: 3.774% (57.1% Hike / 42.9% Hold | +14 bps implied)
Oct 28, 2026 Meeting: 3.850% (31.4% Hike | +22 bps cumulative)
Dec 09, 2026 Meeting: 4.006% (61.3% Hike | +37 bps cumulative)
Jan 27, 2027 Meeting: 4.070% (25.7% Hike | +44 bps cumulative)
Mar 17, 2027 Meeting: 4.170% (40.1% Hike | +54 bps cumulative)
Apr 28, 2027 Meeting: 4.200% (10.9% Hike | +57 bps cumulative)
Market-implied odds for a 25 bps rate hike at the September 16 FOMC meeting increased to 57.1% following the speech (up from 35% the prior day).
Global Macro & Sovereign Yield Comparison
Sovereign 10-Year Yields, Inflation & FX Benchmark Summary:
United States: 10Y Yield: 4.72% (-1 bp 1Mo) | CPI (YoY): 3.40% | GDP (YoY): 2.10%
Canada: 10Y Yield: 3.72% (+6 bps 1Mo) | CPI (YoY): 3.00% | USD/CAD: 1.39 (-0.9%)
United Kingdom: 10Y Yield: 5.14% (+10 bps 1Mo) | CPI (YoY): 2.90% | GBP/USD: 0.74 (-0.4%)
Germany: 10Y Yield: 3.31% (+10 bps 1Mo) | CPI (YoY): 2.90% | EUR/USD: 0.86 (-0.6%)
Japan: 10Y Yield: 2.91% (+15 bps 1Mo) | CPI (YoY): 1.90% | USD/JPY: 159.74 (+1.5%)
Australia: 10Y Yield: 5.09% (+16 bps 1Mo) | CPI (YoY): N/A | AUD/USD: 1.40 (-2.0%)
Key Economic Calendar & Events
Upcoming U.S. Economic Releases & Events:
Tue 09/01 (10:00 AM): ISM Manufacturing | JOLTS Job Openings
Wed 09/02 (08:15 AM): ADP National Employment | Fed Beige Book
Thu 09/03 (10:00 AM): ISM Services PMI
Fri 09/04 (08:30 AM): US Nonfarm Payrolls / Unemployment Rate (Bond Market Close 2:00 PM)
Mon 09/07 (All Day): Labor Day (U.S. Financial Markets Closed)
Wed 09/09 (01:00 PM): 10-Year U.S. Treasury Auction
Thu 09/10 (08:30 AM): Producer Price Index (PPI) | 30-Year U.S. Treasury Auction
Fri 09/11 (08:30 AM): Consumer Price Index (CPI) | U. of Michigan Sentiment
Wed 09/16 (02:00 PM): FOMC Rate Decision & Policy Statement
If you have any questions or would like to discuss a loan request, please reach out to the IGA Capital team directly.
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