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Trump turned down Iran’s offer to reopen the Strait of Hormuz, and oil climbed back above $106. But of the 120 basis points the 10-year yield has added since the war began, 111 came from the Fed’s side of the ledger, not from inflation fears. That split decides whether peace ever reaches your mortgage.
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September 28, 2026 • Morning edition • No hype, just perspective.
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The Bond Market Priced the War Out. It Priced the Fed In.
President Trump turned down Iran’s offer to reopen the Strait of Hormuz over the weekend, and Brent crude climbed back above $106 this morning. Yet Treasury’s own data show that of the 120 basis points the 10-year yield has added since the war began, 111 came from real yields, while the market’s inflation forecast barely moved. That split decides whether peace ever reaches your mortgage.
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Target Planned 55 Stores. It Went to 300+. When Green Coffee Company put Juan Valdez coffee on Target shelves, the plan was 55 locations. Demand moved it past 300 — a 445% increase. Some locations sold through inventory in a week. The same coffee is now in Walgreens and 3,000+ stores across 21 states. The company is still private at $1.10 a share. Trace the shelf expansion → Private investments are speculative and illiquid. Returns are not guaranteed. Review the offering circular before investing. Under Regulation A, a company may change its share price by up to 20% without requalifying the offering with the Securities and Exchange Commission. |
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The Scoreboard
• The split: On Feb. 27, the last trading day before the war, the 10-year Treasury paid 3.97% — a 1.72% real yield plus 2.25% of expected inflation. On Friday it paid 5.17%: 2.83% real, 2.34% inflation, per Treasury’s daily tables.
• The oil: Physical Brent went from $71.32 on Feb. 27 to $114.89 on Sept. 22, up 61%, per the EIA. Futures jumped back above $106 early Monday after the rejection.
• The Fed: A quarter-point hike on Sept. 16 took the target range to 3.75–4.00%, the first increase since July 2023. The 2-year yield is up 142 basis points since Feb. 27, to 4.81%.
• Your mortgage:Freddie Mac’s 30-year average hit 7.03% last Thursday, up from 5.98% the week before the war — the first print above 7% since January 2025.
• This week: August PCE inflation lands Wednesday at 8:30 a.m. ET; July ran 3.7% headline and 3.3% core, per the BEA. September payrolls follow Friday.
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Details
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The split hiding in Treasury’s daily table
Last week at the United Nations, Iran’s foreign minister, Abbas Araqchi, put a seven-day clock on the table: accept the plan, and the Strait of Hormuz reopens within a week while the fighting pauses. By Saturday President Trump had waved it off, saying Tehran wants a deal “because they’re losing so badly.” Iran says it is still waiting for a formal answer through mediators. Oil opened the week higher anyway.
So the week opens on the question it has opened on since February: when do the tankers move? That answer sets the price at your pump. For the bigger number in most household budgets, the Treasury Department has been publishing a different answer every afternoon, in a table almost nobody reads.
Two numbers inside one. Treasury splits the 10-year rate in two. The inflation-protected yield is what lenders demand after inflation. The gap between that and the ordinary yield, called the breakeven, is the market’s forecast for average inflation over the next decade. Since Feb. 27 the 10-year has added 120 basis points. The real yield supplied 111 of them. The inflation forecast moved nine.
Put the pieces side by side. Seven months of blockade, a 61% jump in physical crude, headline inflation at 3.7%, and the largest bond market in the world raised its ten-year inflation estimate by less than a tenth of a percentage point.
You don’t have time for a 2,000-word pitch. So here’s the whole case, fast. Green Coffee Company. Colombia’s largest coffee producer. Share price: $1.10. Revenue: $1M in 2021 to $26M in 2025. Farms: 45, with roughly 10 million coffee trees. Processing: 1M+ pounds a week, the largest capacity in Colombia. Retail: 3,000+ stores across 21 states — Target, Walgreens, Kroger, Harris Teeter, and more. Investors already in: 2,000+. Capital raised to date: $120M+. Brand: exclusive U.S. and Canada distribution rights to Juan Valdez. Bonus: up to 20% bonus shares depending on investment size. That’s the pitch. A vertically integrated coffee company in Colombia, already on American shelves, already producing real revenue, still private, and open to individual investors with no accreditation required. Everything above is spelled out in the offering. The company is still private, so liquidity is limited and returns are never guaranteed — read the full details before you decide. Read the full offering → Private investments are speculative and illiquid. Returns are not guaranteed. Review the offering circular before investing. Under Regulation A, a company may change its share price by up to 20% without requalifying the offering with the Securities and Exchange Commission. |
What the market is charging for. Read plainly, investors believe inflation gets beaten. What they are pricing is the cost of beating it. The Fed hiked on Sept. 16 and its projections pencil in one more increase this year. The 2-year yield, the market’s running bet on the Fed path, sat at 3.39% the day before the war and 4.81% on Friday. The real 10-year yield touched 2.85% on Sept. 24, its highest close since November 2008.
I think this is the most misread chart of the year. The headlines treat the rate climb as a war surcharge that lifts once the ships sail. The bond market is treating it as a policy rate, and policy rates come down on data, not on diplomacy. The war’s bill arrived as a higher price for money, and that price answers to the Fed.
Where that leaves you. At 5.98%, a $400,000 30-year loan costs $2,393 a month. At last week’s 7.03%, it costs $2,669, about $276 more, or roughly $3,300 a year. A reopened strait would likely pull the pump price down within weeks. The mortgage math waits on the Fed. The same table has a second side for savers: a 10-year inflation-protected Treasury now yields about 2.8% above inflation for a decade, a level last seen in the 2008 crisis. Whether that belongs anywhere near your portfolio is a question for you and whoever manages it. The number is worth knowing.
Wednesday at 8:30 a.m., the Commerce Department releases August PCE, the Fed’s preferred inflation gauge, alongside its annual data revisions. Friday brings September payrolls, where Barclays expects just 50,000 jobs. A soft pair would take pressure off the real yield from the Fed’s side. A hot pair keeps the Oct. 27–28 meeting live for another hike, whatever happens in the Gulf.
Iran is offering to reopen the strait in seven days. The bond market already assumed the oil shock ends. What it has yet to assume is a Fed that stops — and that negotiation opens Wednesday at 8:30.
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Harold Winston
Thirty years reading markets for a living.
No hype, just perspective.
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