Iowa Business Report 26-42 (Oct. 16-18, 2026)

The latest financial data shows inflation continues to be a problem, and that could affect how the Federal Reserve acts later this month.

National financial journalist Jordan Goodman breaks down the reasons for the stubbornly high numbers.

So we have the consumer price index come in at an annual rate of change of 3.7% year over year, and then producer prices came in up 6.3% year over year.

Now, those are clearly higher than what the Federal Reserve is looking for, which is 2% inflation.

And clearly, they're being driven by higher oil and gasoline prices, not only directly, but also working through the system.

I mean, transportation costs, airline fares, everything else is related to that.

And so that came in hotter than expected.

That meant that interest rates went up on long-term treasuries, and Wall Street's now thinking that the Federal Reserve's probably going to raise interest rates at their next meeting, not next week, but the week after that, because they just can't keep inflation going this hot without trying to do something about it.

They raised rates a quarter point last month in September.

Now it looks like they're going to do it again.

So that's set off a whole series of other things, because when interest rates go up from that and bond prices go down...

And it also affected the stock market.

The stock market went down this week because the feeling of higher interest rates affects stocks, and particularly the stocks that have been the hottest, tech stocks, and particularly artificial intelligence-related stocks, fell the most this week.

So it kind of was a series of events all kicked off because of higher oil prices.

It would be one thing to say, well, one segment of the economy was at an inflated rate, but because it was siloed off over here, it doesn't affect everything.

But when you're talking about energy costs, when you're talking about fuel, that affects everything because of supply chain issues, distribution, etc.

So it's not like they can say, well, it's just this aspect of the economy because of the impact on every other aspect.

And I'll add to that, we've just added 50% tariffs on Canadian oil, all kinds of Canadian products, but Canadian oil, so that adds even more.

These are all what I would call self-inflicted wounds.

We didn't have to do any of these.

We didn't have to have the war with Iran.

We did not have to have the battle with Canada.

But now we're seeing the result of it, and it costs the government a lot more.

When interest rates go up, it means the cost of paying interest on the Treasury bonds goes up.

which makes the deficit that much work.

The latest financial data shows inflation continues to be a problem, and that could affect how the Federal Reserve acts later this month.

National financial journalist Jordan Goodman breaks down the reasons for the stubbornly high numbers.

So we have the consumer price index come in at an annual rate of change of 3.7% year over year, and then producer prices came in up 6.3% year over year.

Now, those are clearly higher than what the Federal Reserve is looking for, which is 2% inflation.

And clearly, they're being driven by higher oil and gasoline prices, not only directly, but also working through the system.

I mean, transportation costs, airline fares, everything else is related to that.

And so that came in hotter than expected.

That meant that interest rates went up on long-term treasuries, and Wall Street's now thinking that the Federal Reserve's probably going to raise interest rates at their next meeting, not next week, but the week after that, because they just can't keep inflation going this hot without trying to do something about it.

They raised rates a quarter point last month in September.

Now it looks like they're going to do it again.

So that's set off a whole series of other things, because when interest rates go up from that and bond prices go down...

And it also affected the stock market.

The stock market went down this week because the feeling of higher interest rates affects stocks, and particularly the stocks that have been the hottest, tech stocks, and particularly artificial intelligence-related stocks, fell the most this week.

So it kind of was a series of events all kicked off because of higher oil prices.

It would be one thing to say, well, one segment of the economy was at an inflated rate, but because it was siloed off over here, it doesn't affect everything.

But when you're talking about energy costs, when you're talking about fuel, that affects everything because of supply chain issues, distribution, etc.

So it's not like they can say, well, it's just this aspect of the economy because of the impact on every other aspect.

And I'll add to that, we've just added 50% tariffs on Canadian oil, all kinds of Canadian products, but Canadian oil, so that adds even more.

These are all what I would call self-inflicted wounds.

We didn't have to do any of these.

We didn't have to have the war with Iran.

We did not have to have the battle with Canada.

But now we're seeing the result of it, and it costs the government a lot more.

When interest rates go up, it means the cost of paying interest on the Treasury bonds goes up.

which makes the deficit that much work.