Do note the sequence: the Treasury Secretary declared himself the house, underwhelmed the market on Tuesday, and was rescued on Wednesday by the very bond vigilantes he was posturing against — for a price.

Could the US 10-year Treasury yield really hit 7%? The Macro Butler makes the case the consensus doesn’t want to hear. 🎙📈🔥

The Macro Butler is back on Piggo’s Trading Desk for a wide-ranging deep dive into the macro forces reshaping beyond of 2026 — and the single call that should be on every investor’s radar:

📈 Bond yields to 6.5-7% — why rising government borrowing costs are becoming the defining macro risk ahead, and how a $40 trillion debt pile meets a bond market that has stopped pretending Treasuries are risk-free.

🪙 Stablecoins & the GENIUS Act — how Washington is quietly engineering a captive new buyer for its short-term debt, and why it is the “digital gulag” .

🇨🇳 China vs. the US — BYD, EVs, and a manufacturing machine pulling ahead while the West debates industrial policy it dismantled decades ago.

🛢 Commodities, diesel shortages & coal-to-liquids — the energy squeeze the consensus keeps ignoring.
🥇 Gold, silver & bullion storage — why The Macro Butler remains a skeptic on Bitcoin and XRP, and a believer in the metals that can’t be printed.

⚔️ The Iran war & Kharg Island — the geopolitical wildcard that could reprice energy overnight.
Zero hopium. Zero soft landings. Just the macro playbook history keeps validating.

🎧 Watch the full conversation on Piggo’s Trading Desk now.

https://themacrobutler.substack.com/p/interview-with-piggos-trading-desk-b17

The forever data dependent ECB raised the deposit rate 25 basis points to 2.5%, the second hike since February's geopolitical unpleasantness, and accompanied it with the most candid summary of the age: risks to the upside for inflation, to the downside for growth. That, in plain English, is stagflation described by people forbidden to use the word. Inflation forecasts were duly marked up — 2.5% for 2027 from 2.3%, 2.1% for 2028, core at 2.6% — with the ECB conceding inflation will "remain well above target for an extended period," courtesy of the Middle East. Guidance was left untouched: well-positioned, data-dependent, meeting-by-meeting, which is central banker for we haven't the faintest idea either. The verdict is crisp — "one hike is not a ceiling" — and markets now price two more by mid-2027. And the euro? It fell.

A hawkish hike that weakens the currency is the market's polite way of saying it is pricing the recession, not the rate.…

The ECB says risks are up for inflation and down for growth; everyone outside a central bank calls that stagflation.

America August producer prices rose 0.4% on the month and 5.4% year-on-year, beating expectations, with July revised up to +0.1%. Core managed a tamer 0.2% and held at 4.6% annually — and the commentariat has already seized on that gap to declare inflation "contained ex-energy," which is the analytical equivalent of saying the patient is healthy apart from the fever. Energy was the biggest driver, courtesy of crude's surge on Middle East escalation, with transportation and warehousing costs climbing alongside. Every good in the American economy travels on a truck, a ship or a plane, so freight inflation is not a category — it is a tax collected at every stage before the item reaches a shelf. And PPI feeds core PCE, the Fed's own preferred gauge, which means today's producer print is tomorrow's justification.

When wholesale inflation is running at 5.4% — the price of your next purchase has already been decided.

The Treasury of the Empire sold $22 billion of long bonds at 5.308%, up from 5.212% in August and the highest yield since August 2001. Buyers arrived in force: a 2.7 basis point stop-through, the second largest ever.

The bid-to-cover of 2.612, the best since February; indirect bidders taking 79.5%, the second-highest on record, while primary dealers were left holding 2.21% — a record low. Wonderful.

Now the sentence nobody read aloud: this was the fifth consecutive 30-year auction to price above 5%. Foreigners are not returning out of affection for American fiscal management; they are returning because a quarter-century-high yield finally compensates them for the risk. That is not confidence, it is a clearing price. And the market's verdict was swift — the post-auction rally evaporated, selling resumed, and the 10-year marched back toward Bessent's uncomfortable 5.00%.

The strongest bond auction in a generation required the highest yield since 2001 — success has rarely been so expensive.

Saudi Arabia pumped roughly 6.2 million barrels a day in August — down 23% from July and the lowest since at least 1990. Exports fell even harder, to about 3.1 million barrels from 5.1 million, the weakest since at least 2013. The cause is elegantly circular: Riyadh rerouted crude through Yanbu on the Red Sea to avoid the contested Strait of Hormuz, whereupon the Houthis declared a maritime embargo on Saudi ports and struck Yanbu, the 400,000 bpd Jazan refinery and southern cities, wounding over seventy people. Two exits from the Gulf, both now hostile. So: the world's swing producer is no longer swinging, the spare capacity everyone assumed exists cannot reach a ship, the US SPR is at 1982 lows.

The oil didn't run out — it simply ran out of a safe way to leave.

September's preliminary University of Michigan sentiment collapsed to 47.8 from 51.7, missing the 51.0 consensus, with expectations cratering to 45.8 from 51.5 — near record lows. Current conditions held up marginally better at 50.9, which is to say the American consumer finds the present merely dreadful and the future considerably worse. Year-ahead inflation expectations jumped to 4.6% from 4.0%, the highest since June — and who can blame them, with Brent above $100, and Saudi exports at their lowest in over a decade. The partisan detail is the telling one: Republicans, the group most inclined to approve, posted a marked decline in favourability toward government economic policy, with opinions of economic policy worsened about 10%. Sixty-two percent expect higher interest rates, 61% expect higher unemployment, and real wages have now been negative for five consecutive months. The government's own statisticians report 162,000 new jobs; the people holding those jobs report they are losing ground.

When even the ruling party's voters stop believing the numbers, the stagflation has already started — the data simply hasn't been told yet.

The Kingdom has shut down its East-West pipeline after drones struck multiple pumping stations, with satellite imagery showing fires near Al Mesba'ah and Al Dhekra and black smoke across western Saudi Arabia. US officials suspect the drones came from Iraq; nobody has claimed it and Aramco has said nothing. Grasp the scale: this line carries roughly 5 million barrels a day to Yanbu on the Red Sea, out of some 7 million of pumping capacity, and it exists precisely so the world's largest exporter can bypass the Strait of Hormuz. Hormuz is contested. Yanbu is under Houthi embargo. And now the road between them is closed. One small mercy — pumping stations repair far faster than a ruptured trunk line — though nobody has said which was hit.

It took decades to build a pipeline around the Strait of Hormuz, and one afternoon of drones to close it.

🤵 The Macro Butler The Week That It Was as of September 11, 2026, 🤵

🌐 When carmakers build missiles and inflation remains an uninvited guest, physical gold remained the only sober asset in a drunk economy. 🌐

Read more here: https://themacrobutler.substack.com/p/the-week-that-it-wasas-of-september-9c8

🤵 The Macro Butler Weekly Digest 🤵

🌐 America is not losing the reserve currency to China. It is confiscating it from itself — one sanctions announcement at a time. 🌐

Read more here: https://themacrobutler.substack.com/p/swift-and-punishment

Listen to a summary of The Macro Butler The Week That It Was newsletter via podcast on Substack; YouTube; Rumble; Spotify & TikTok.

https://themacrobutler.substack.com/p/the-week-that-it-wasas-of-september-828

Listen to a summary of The Macro Butler weekly newsletter via podcast on YouTube.

https://themacrobutler.substack.com/p/swift-and-punishment-podcast