Finance News · Thursday, 27 August 2026

01 · Briefing · what happened

Inflation stuck at 3.7% for a 65th month. Korea raised again before the last rise landed.

Finance News 1 min 38 sources

America's inflation gauge refused to fall in July, and traders moved from expecting nothing to pricing a 44% chance of a rate rise on 16 September. South Korea did not wait for evidence at all: it raised for a second meeting running, hours before the Jackson Hole gathering opened.

3.7%

US inflation, year on year

unchanged from June, and above target for a 65th month [1][17]

44%

chance traders give a September US rate rise

up from about 36% before the figures landed [2]

3.00%

South Korea's main interest rate

a second rise in a row, its highest since February 2025 [8]

4.664%

US 10-year borrowing rate

it rose even as oil fell for a fourth day [7]

At a glance

US inflation held at 3.7% a year in July, unchanged from June and above the Federal Reserve's 2% target for a 65th straight month. [1][17]
Core inflation - the measure that strips out food and fuel - stayed at 3.3%, exactly where June left it. [3][4][7]
Economists had expected a smaller 0.1% rise on the month. It came in at 0.2%. [18][5]
Traders now put a 44% chance on a US rate rise at the September meeting, up from about 36% just before the figures landed. [2]
The Fed has not moved since December. Its rate has sat in a band of 3.50% to 3.75% for eight months. [1][2]
July's reading was published on 26 August. The meeting that will act on it is 16 September, nearly seven weeks after the month it measures ended. [1][17]
South Korea did not wait. Its central bank raised to 3.00% overnight, a second rise in two meetings, its highest rate since February 2025. [8][9]
Korea's own rate-setters now pencil in 3.25% by the end of this year and one further rise in early 2027. [8]
Kevin Warsh, the Fed's new chairman, speaks at Jackson Hole on Friday. He has scrapped the practice of telling markets what comes next. [10][11][12]
Of 31 economists surveyed by CNBC, 80% want more from him. Some 45% expect no steer on rates at all. [11]
The dollar rose to an eight-day high of 99.13 against six big currencies, and the 10-year US borrowing rate rose to 4.664%. [6][7]
Cheaper fuel did not help. Bond yields rose anyway, because the measure the Fed leans on most is the one that leaves fuel out. [7][14]
The 30-year US borrowing rate sat at 5.181% and the two-year at 4.199% before the figures landed. [16]
The US Treasury is doubling its buying-back of long-term debt to $4bn from 9 September, after long-term borrowing costs hit a near two-decade high last week. [13]
A $70bn sale of five-year government notes went ahead on Wednesday, with a seven-year sale following on Thursday. [14]
Wall Street traded flat on the third-quietest trading day of 2026, while the dollar and borrowing rates ticked up. [19][37]
The pound slipped 0.2% to $1.3625, off a six-month high, with almost no British news to move it. [38]
The next reading lands on Thursday: weekly US jobless claims, forecast at 208,000 against 206,000 the week before. [20]

Forces in play

Stuck prices High→

3.7% for a second month running, and 65 months above target [1][17]

Pressure to raise Building↑

44% priced for September, and traders are sure of a rise by December [2]

Silence from the chair Building↑

45% of surveyed economists expect Warsh to give no steer on Friday [11]

Falling fuel costs Easing↓

Brent down a fourth day to $87.24 on talks to reopen the Strait of Hormuz [25][27]

In play Kevin Warsh — the Fed's new chairman, who speaks on Friday and has stopped signalling The Bank of Korea — raised to 3.00% overnight, its second rise in two meetings US bond investors — pushed the 10-year rate up even as oil fell for a fourth day Ryozo Himino — a Bank of Japan deputy governor whose speech may confirm a September rise

How it unfolded

December the Fed's rate last moved, into a band of 3.50% to 3.75% [1]
May US inflation peaks at 4.1% after the Iran war lifts energy prices [1]
July the month the new figures measure: 3.7%, core 3.3% [1][3]
26 Aug the figures are published, and hike odds move to 44% [2]
27 Aug Korea raises to 3.00%, and Jackson Hole opens [8][6]
16 Sept the Fed meets, acting on July's picture [17]

Where this points

Watch whether Warsh names on Friday what would make him raise: the 44% priced for September is a guess about a man who has said nothing.

Also today

9 more stories on this beat.

Nvidia promises 70% growth next year

Finance chief Colette Kress said revenue would grow 70% in the year to January 2028, against the 44% analysts expected. Shares rose more than 4% after hours, with Wall Street focused on its $30bn of other companies' shares. [21][22][23]

Why it matters — Supply sets the ceiling now, not demand - Jensen Huang said memory shortages cap what Nvidia can ship. [21][24]
Oil falls a fourth day on Hormuz talks

Brent crude fell 0.7% to $87.24 a barrel after Iran and Oman said they were finalising a temporary framework to reopen the Strait of Hormuz. [25][26]

Why it matters — The strait carried a fifth of the world's oil before the war. Flows are now about a quarter of that. [25]
Japan's importers give up on a strong yen

The yen traded near 159 to the dollar, having touched a near 40-year low of about 164 in July before officials stepped in. [28][6]

Why it matters — One beef importer now fixes prices quarterly rather than monthly, because the currency moves faster than his contracts. [29]
Brazil's debt bill reprices overnight

Brazil's Treasury said the share of its debt tied to the Selic, its overnight interest rate, could reach a record 53% this year, up from 51.1% in July. [30]

Why it matters — Where a country borrows at floating rates, a rate rise lands the same night, and investors expect debt to rise whoever wins October's election. [30][31]
Britain hands the Bank of England a new job

The Treasury will give the Bank a second objective, to support payments innovation and digital money such as stablecoins, keeping financial stability first. [32]

Why it matters — Stablecoins are crypto tokens designed to hold a fixed value, and Britain already softened its planned capital rules for their issuers. [32]
Swiss regulator presses UBS on capital

Antoine Martin, vice chairman of the Swiss National Bank, backed rules making UBS hold roughly $20bn more of its own money against its foreign arms. [33]

Why it matters — Swiss banking grew far more concentrated after UBS absorbed Credit Suisse in 2023, so one failure now reaches further. [33]
Africa launches its own credit scorer

The African Union will open an African credit rating agency in Mauritius on 5 October, an alternative to Fitch, Moody's and S&P Global. [34]

Why it matters — African governments say the big three downgrade them too fast in crises. The agencies say they apply one formula worldwide. [34]
Court lets Evergrande claim reach PwC's parent

A Hong Kong judge ruled that PwC International owed Evergrande a duty of care. The team winding up the collapsed developer can now pursue a 57bn yuan ($8.48bn) claim over its audits. [35]

Why it matters — A global firm's local partnerships have long been treated as separate. This decision tests whether the name at the top carries the bill. [35]
Salesforce lifted by a paper gain

Salesforce shares rose 11% straight after its results and about 13% later in the evening, helped by a $2.6bn gain on its stake in the AI firm Anthropic. [36][22]

Why it matters — Net income jumped 87% to $3.53bn, but much of that came from an investment revalued rather than software sold. [36]

02 · Lesson · why it matters

The turn you already made has not arrived yet

A rate set today acts on next year from a picture of last month, so the danger is steering again before the last turn has landed.

How it works

You are steering toward a target you cannot see directly
So you read a measurement taken weeks ago
You act, and the effect takes about a year to arrive
Nothing moves, so you act again
Then both moves land at once and you sail past
Now you are correcting your own correction

The twist

In a system that answers slowly, the way you overshoot is by being right twice about the same problem.

Where you've seen this

A hotel shower

you turn the tap, feel nothing, turn it further, and scald yourself

Hiring

a firm hires for the backlog it had six months ago and is overstaffed by the time they start

Motorway traffic

drivers brake for a gap that closed a mile back, and a jam appears out of nothing

The catch

Not every system is slow. Where a debt is written to reprice tonight, the move lands tonight, and the danger flips: you feel it before you can take it back.

And the whole of it

A household reads the world the same way. The bill that arrives this month was set somewhere last year, by people reading numbers about the year before that. Nobody in the chain, ourselves included, is looking at now.

03 · Lab · your turn

The Long Pipe

Set a rate that takes a year to bite, and feel how easy it is to correct twice for the same problem.

04 · Truth · what's really going on

Stripped of the framing

Nobody in this story knows whether the last rate rise worked yet, so the argument about the next one is being settled by a six-week-old number and by what a man declines to say on Friday.

Why it lands — A figure published today reads as news about today, so a measurement of July arrived on 26 August and moved the price of money within the hour.

Claimed

What people said. Not yet a fact.

Kevin Warsh, the Fed's chairman

He has vowed to end above-target inflation. [2]

He has given no indication whether he thinks it recedes without rate rises, and 45% of surveyed economists expect no steer from him on Friday either. [2][11]
Heather Long, chief economist at Navy Federal Credit Union

The United States still has an inflation problem, and the data give Warsh time to wait and see. [2]

The same quote asks him to say what he is watching, which is the thing he has removed.
Frank Flight, macro strategist at Citadel Securities

Worries about the Fed's credibility are overstated, and long-term yields are headed lower. [15]

He predicted a July rate rise that did not come, on a day the Dow fell 1,150 points for its worst session in 15 months. [15]
Gareth Leather, economist at Capital Economics

Korea's economy can absorb this rise, but the case for further ones is less clear. [8]

Said hours after Korea's own rate-setters pencilled in 3.25% by year end and another rise in early 2027. [8]
Fitch, Moody's and S&P Global

Their sovereign ratings follow the same formula across the world. [34]

African leaders say the big three downgrade African economies too quickly during conflicts and pandemics, which is why the African Union is opening its own agency on 5 October. [34]

Verified

What we could actually stand behind.

US inflation was 3.7% in the year to July, with core at 3.3%, both unchanged from June. [1][3][4][5]

How we checked — Four independent outlets reporting the same Bureau of Economic Analysis release, not each other.
July was the 65th consecutive month with US inflation above the 2% target. [1][17]

How we checked — Two independent sources counting it the same way, one before the release and one after.
The Bank of Korea raised to 3.00%, a second rise in two meetings, predicted by 18 of 35 economists in a Reuters poll. [8][9]

How we checked — Two separate reports on the decision, plus the central bank's own updated projections.
The Fed's rate has been in a band of 3.50% to 3.75% since December. [1][2]

How we checked — Stated identically in two independent Reuters reports filed hours apart.
Markets moved from about a 36% chance of a September US rate rise to 44% after the figures. [2]

How we checked — One source only, read off what traders were paying for bets on the rate. A separate outlet quoted 40% from CME FedWatch shortly before the release, so the starting point is not agreed. [17]

Nobody knows

Open questions — ours included.

What June's inflation reading actually was.

Three reports say July was unchanged from June at 3.7%, while a fourth says July edged up to 3.7% from 3.6%. The same wire service is on both sides. [1][2][4][7]
Whether the last rate rises are still working.

The July figures conflict with earlier reports that showed consumer price inflation slowing over the previous two months, and nobody can separate a stall from a lag. [2]
What Warsh will say on Friday.

He has stopped the old practice of telling markets what the Fed will do next, on purpose. Of 31 economists surveyed, 45% expect no view on rates at all, 32% expect a hawkish tone and 19% expect neutral. [11]
Whether the Strait of Hormuz actually reopens.

Iran and Oman are still finalising details of a temporary framework, and the two sides remain far apart on ending a war now in its seventh month. [25]

Who gains

Kevin Warsh — By publishing no guidance he keeps every option open and cannot be held to a path, which is exactly what signalling the path ahead used to remove. [11][12]
Holders of Brazil's floating-rate government debt — A record 53% of that debt is tied to the overnight rate, so every rise pays them more the same night, with no waiting. [30]
Memory chip makers — Nvidia says a shortage of memory, not weak demand, is capping its growth at 70%, which prices the scarce part rather than the finished one. [21][24]
Whoever is short long-term US bonds — The crowded bet against them has paid while yields rose, though Citadel warns the same crowd would have to buy back if bonds turn. [15]

Who pays

Anyone borrowing long in the US — Long-term borrowing costs hit a near two-decade high last week, and the 30-year rate sat at 5.181% before this week's figures. [13][16]
Japanese importers — With the yen near 159 to the dollar, one beef buyer is routinely outbid by buyers from China and Thailand, and now fixes prices quarterly instead of monthly. [29]
Brazil's Treasury — The more of its debt that floats, the faster a rate rise feeds into what it owes, and the share is heading to a record. [30]
African governments raising money abroad — They are scored by three firms they say misjudge them, and the alternative agency does not open until October. [34]

05 · Hope · carry this

The slowness that hides whether today's medicine is working also means the work already done is still arriving. Much of next year's relief was set in motion months ago.