Authored by Kimberly Hayek via The Epoch Times,

The Justice Department has added eight major grocery chains to its beef affordability investigation.

The announcement came Tuesday in a post from the department’s official X account. Associate Attorney General Stanley Woodward sent the retailers the letters concerning recent increases in the retail price of beef.

The list includes Kroger, Publix, Walmart, Albertsons, Aldi, Ahold Delhaize USA, Costco, and Amazon.

The DOJ’s Antitrust Division “has expanded its investigation to include 8 of the largest grocers when it comes to beef affordability,” the post read. “Beef prices are a critical concern to Americans, and a priority for this Justice Department.”

Nothing more was released about what the letters demand or when answers are due.

The department had already been investigating the big meatpackers. Cargill, Tyson Foods, JBS, and National Beef handle roughly 85 percent of the nation’s beef processing.

President Donald Trump ordered the Justice Department to probe the packers in November 2025, pointing to possible collusion and price manipulation. Acting Attorney General Todd Blanche said in May the department had already analyzed more than 3 million documents. Ranchers, cattlemen, producers, and processors all received calls or were interviewed.

Texas Attorney General Ken Paxton launched his own investigation that same month. He said Texans deserve fair prices at the store and ranchers deserve fair pay for their work.

Beef prices at the checkout have hit consumer pocketbooks. Ground beef sat near $7 a pound in the second quarter of this year. That was up about 70 percent since early 2021. Overall retail beef prices hit new records earlier in 2026.

The cattle herd itself is the smallest in decades amid drought, feed costs, and other pressures thinning the numbers. Ranchers’ cut of every retail dollar has fallen to historic lows, while the big processors posted strong profits.

Earlier this spring, the department settled with Agri Stats, a data firm that shared detailed pricing and production numbers among the big processors. Officials said the practice cut competition and helped processors identify opportunities to push prices higher on chicken, pork, and turkey.

Agriculture Secretary Brooke Rollins has repeatedly pointed to the tight hold the four packers have on the market. The administration has tried other moves as well-opening more land for grazing, adjusting import quotas on lean trimmings for ground beef, and pushing programs to rebuild cattle herds nationally.

Russian President Putin is this week attending the Eastern Economic Forum in Vladivostok, where he has issued key statements and at times fielded questions from the press.

Among the most important questions asked from the press pool were on the matter of whether peace in the Ukraine conflict is still possible, given that this very week things have drastically escalated.

Among the major escalations include Zelensky’s threat to ‘close Russian skies’ through ramped-up drone and missile attacks, or in effect threatening even civilian aviation.

Somewhat surprisingly, Putin responded by saying that yes, there is still a chance for settlement in the Ukraine crisis. As a reminder, Putin has still not yet raised the operation to status of full-scale ‘war’ – instead it remains at the level of Special Military Operation.

The exchange with the press is transcribed below via state media:

Reporter: Are there any chances for a settlement of the Ukrainian conflict? In my opinion, yes, there are,” Putin said at the plenary session of the Eastern Economic Forum (EEF-2026).

Putin: First of all, it is Russia and Ukraine that should come to an agreement, the president said.

At the same time, Russia is grateful to everyone who is trying to contribute to the resolution of the conflict, the president said, adding that China is constantly focusing on resolving the conflict and believes that the problem should be solved by peaceful means.

Putin affirmed that the two sides’ intelligence services have an open line of contact. Presumably, this is how occasional prisoner swaps are conducted – which have become somewhat routine throughout the conflict, now in its fifth year.

“Indeed, contacts do exist. They continue in the current mode as well, primarily through the special services,” Putin said.

However, while outlining the chances for future peace settlement, he did acknowledge the Kiev and its Western backers are making this harder by the day:

“We have just heard about threats of attacks on civilian aircraft, which is, of course, a manifestation of state terrorism. And this complicates, of course, complicates the possibility of holding bilateral peace talks,” Putin said at the plenary session of the Eastern Economic Forum (EEF-2026), also referring to Norway’s seizure of a Russian ship.

He blasted the Western allies’ silence concerning these instances of ‘international terrorism’ – also after this summer Ukrainian drones have attacked even Russian online retail warehouses and hubs (belonging to Wildberries in particular).

Russian President Vladimir Putin said on Thursday there was a chance of reaching an agreement to end the war in Ukraine, while Kyiv said it expected a “new dynamic” in peace efforts. —Reuters

Putin on Ukraine:

We’ve now heard about threats of attacks on civilian aircraft. This is, of course, a manifestation of state terrorism.

And this certainly complicates the possibilities of holding bilateral peace talks. pic.twitter.com/xqFfR5PFN2

— Clash Report (@clashreport) September 3, 2026

Zelensky has openly stated he wants to make it hard for Russian society to even function, explaining that the country should feel just as much pain – if not more – than what Ukrainian citizens are suffering. He further wants the Kremlin to feel enough pressure that it will come to the negotiating table, hat in hand. But at this point the warring sides seem more hardened in their demands than ever.

OpenAI President Greg Brockman said Thursday that he believes the company has reached artificial general intelligence, and that its latest model, GPT-6 Astra, marks the beginning of the so-called “AGI era,” according to Axios.

Speaking to reporters, Brockman called Astra a “generational leap” and said it could eventually be viewed as the moment AGI arrived. “I think it might be about this model,” he said when asked whether Astra meets that definition.

While there is no agreed-upon test for AGI, and Brockman said that he will leave the final judgment to users, he ended the call with reporters by saying, “Welcome to the AGI era.”

Brockman’s comments raise the stakes for a model OpenAI is positioning as a step beyond chatbots toward systems that can carry out complex professional work with less human direction. Astra is OpenAI’s first model designated as reaching a “critical” cybersecurity threshold under the company’s preparedness framework. The company earlier delayed the release to add safety testing after concluding the model could hit that threshold.

2/6 Created an underwater exploration game in one /goal prompt, all the 3D elements and sounds were made from scratch. pic.twitter.com/mTRTbjYAR7

— Pietro Schirano (@skirano) September 3, 2026

The designation means Astra can find previously unknown software vulnerabilities and build working exploits against hardened systems without being told where to look. OpenAI says the version available through standard access will refuse advanced cyber work, including exploit discovery, with broader access reserved for vetted defenders.

Axios reports:

GPT-6 Astra will first be available to a limited set of organizations in OpenAI’s Daybreak Access program and will be available “in the coming days” for ChatGPT Plus, Pro, Business and Enterprise customers and API developers.

“We will need to strengthen our ability to monitor these models either via extending chain-of-thought monitoring, integrating other ideas like activation monitoring, or finding more specific ways to get the models to be more verbose in their chain of thought,” OpenAI chief scientist Jakub Pachocki said during the briefing with reporters.

Brockman’s AGI remarks come a day after Nvidia CEO Jensen Huang struck a similar tone about the current state of AI.

$NVDA CEO @JensenHuang told Commerce Secretary @howardlutnick at the G20 @g20org today that we are practically at AGI. I think he is right about the direction. Credit to @howardlutnick. Howard has put Commerce at the center of the AI build, and he has treated this as industrial… pic.twitter.com/6RTO0iOQmu

— Patrick F. Feeley (@PFFeeley) September 2, 2026

In a fireside chat Wednesday with Commerce Secretary Howard Lutnick at the G20 Innovation Ministerial in Chapel Hill, North Carolina, Huang said systems would “achieve essentially what people call AGI” in the next couple of years, and that “we’re practically there today.” Whether that milestone “means a lot or it doesn’t mean anything” is a separate question, the Nvidia chief continued.

“Suppose, several hundred years ago, humans, in order to have a more civil society, manufactured one of the most important things in the world, which is called education intelligence. Through universities and schools we manufacture intelligence and we manufacture stability at scale,” he added. “Without it, how would we have civilization? And so now we’re creating the digital version of that. We’re manufacturing now intelligence digitally at scale so that even countries and people who don’t have access to the highest levels of education now have the benefits of the highest levels of education. Okay? And so that’s the simplest way of thinking about what is happening right now.”

Ride-hailing giant Uber is reportedly aligning with drivers’ unions in several cities to slow robotaxi deployments and promote regulations requiring “hybrid networks” that combine autonomous vehicles with human drivers, according to the Financial Times.

The unholy alliance is taking shape in states and cities including New Jersey and Washington, DC, where Uber and organized labor are pushing back against the rapid expansion of autonomous taxi services.

In New Jersey, Uber lobbyists proposed requiring any platform offering robotaxi services to ensure that human drivers provide at least 85% of rides during a three-year pilot program. The ride-hailing company, led by CEO Dara Khosrowshahi, has also joined unions in opposing autonomous vehicle legislation in Washington, claiming that the proposed permitting regime could lock out smaller competitors and platforms such as Uber.

Uber is pitching its effort to slow the rollout of fully autonomous taxis amid mounting competitive pressure from Alphabet-owned Waymo and Tesla’s emerging Cybercab. Such regulations, enacted on a city-by-city basis, could eventually create significant obstacles for competing services from Waymo, Tesla, and others that operate without human drivers.

Mandating hybrid networks could preserve Uber’s existing dominance and protect its human-driver network while allowing only a limited share of autonomous vehicles. In other words, Uber’s newfound concern for labor may have less to do with protecting drivers than with protecting its market share.

The FT noted that Uber remains “behind its arch-rival Waymo” in autonomous driving technology, suggesting that hybrid-network mandates may be designed to protect its market share while the company advances its own robotaxi technology. It would be a great example of weaponizing regulation to slow the competition. 

Submitted by QTR’s Fringe Finance

Before I get into today’s idea, let me remind readers that I believe there is a very real chance that the AI boom could be coming to an end later this year and into early next year.

I detailed my thoughts on why the AI boom could end in an article called “The Real AI Crash Will Start This Year” that I published two weeks ago. I supplemented this piece with another article last week called “8 Sharp Bear Cases You Must Read Today”, which explores almost all of the possible reasons I can think of to be bearish on the stock market today.

I suggest reading both of these pieces carefully and keeping in mind that today’s article is a very first look into a sector that may or may not ever catch on in the US and will likely be highly dependent on AI’s continued expansion as a catalyst to flourish.

Having said that, if you’re still bullish on the AI build out and the market at this point, there’s an emerging theme that may be under-noticed and worth a look.

The theme is geothermal energy, and specifically the possibility that next-generation geothermal becomes part of the solution to America’s rapidly growing AI power needs. AI power needs drove my nuclear thesis last year as nuclear stocks outperformed the market in 2025 and helped my 25 Stocks I’m Watching For 2025 beat the S&P by more than +50%.

And while I am still bullish on nuclear, as I wrote about at the beginning of this year, geothermal energy is now on my radar as well…not to replace nuclear, but to supplement it potentially. And more importantly, as a potential “story” theme heading into next year.

This thesis is still very early and speculative, and there is a very real chance it never develops into anything meaningful. I’m not screaming to go out and buy anything right now. But there are enough pieces starting to come together that I think it’s worth understanding the theme now and keeping an eye on it.

First, a little background. Geothermal is essentially power generated using heat stored beneath the Earth’s surface. In a conventional geothermal plant, developers drill into naturally occurring underground reservoirs of hot water or steam and use that heat to generate electricity. The technology itself isn’t new. The U.S. has been producing geothermal electricity for decades and has several gigawatts of generating capacity today, but despite that history, geothermal still represents less than 1% of U.S. electricity generation.

The biggest problem has always been geography. Traditional geothermal works best in places where you happen to have the right combination of underground heat, water and permeable rock relatively close together. That has historically restricted development to certain parts of the western U.S. and other geologically favorable areas around the world.

What has changed is the emergence of enhanced geothermal systems, or EGS. Rather than waiting for nature to provide the perfect underground reservoir, EGS attempts to engineer one. Developers drill deep into hot rock and use techniques borrowed heavily from the oil and gas industry, including horizontal drilling and hydraulic stimulation, to create pathways through which water can circulate, absorb heat and return to the surface. Think of it, very roughly, as applying some of the technologies that transformed U.S. shale production to geothermal energy.

None of this is easy. Drilling several kilometers underground is expensive, the geology can be unpredictable, and developers have to prove these reservoirs can maintain sufficient temperatures and flow rates for years. There are also questions around water loss, drilling costs, induced seismic activity and whether the economics ultimately work at commercial scale. It is entirely possible that some of these problems prove harder or more expensive to solve than proponents currently expect.

But if they can be solved, the potential is significant because enhanced geothermal could remove one of the biggest historical limitations on geothermal power: location. Instead of needing a naturally occurring geothermal reservoir, developers could potentially build plants across much larger portions of the country wherever sufficiently hot rock can be reached economically.

That is where this starts becoming particularly interesting in the context of AI. One of the biggest constraints facing the AI buildout increasingly isn’t just chips. It’s electricity. AI data centers require enormous amounts of reliable power, and developers need sources capable of operating essentially around the clock.

Geothermal has some attractive characteristics for that purpose because it’s renewable, which can appease the clean energy and climate change lot should it return after midterms in 2028, and unlike solar and wind, it doesn’t depend on whether the sun is shining or the wind is blowing.

If AI data centers continue proliferating across the U.S., the industry is going to need huge amounts of additional electricity. Utilities and technology companies are already looking at virtually every possible source of dependable generation, and geothermal could eventually become one piece of that puzzle. 

For more on what specifically caught my attention on geothermal energy, and the pure play stocks that I think would benefit if geothermal becomes popular, you can read my full analysis here.

President Trump took to Truth Social on Thursday to rage against US media coverage of the Iran war (not for the first time), following Treasury Scott Bessent giving similar scathing remarks earlier this week.

Trump particularly singled out recent and ongoing reports of US missile and interceptor shortages, which he has slammed as false. He called out the “treasonous SCUM” in the media for issuing supposedly inaccurate reports on “our Military Operation in Iran” – claiming that the US has “virtually unlimited amounts of Mid to High Grade Ammunition”.

But also notably, and in a seeming implicit contradiction, he said the USA is not at the moment “selling them to others” but is producing and stockpiling at “levels never seen before.” This is amid an ongoing scramble for Europe to find an avenue to transfer more Patriots to Ukraine, as Zelensky is essentially betting for more missiles.

Trump once again further blamed the prior Biden administration for handing “hundreds of Billions of Dollars” to Ukraine and NATO “free of charge” in connection with the war with Russia.

From think tanks to NY Times to Wall Street Journal to independent media, pundits, journalists and officials have been raising the alarm on the issue.

This also comes after Trump told journalists in the Oval Office on Monday that the “older stuff” can always be used, when he was pressed over whether the United States is running out of standoff munitions:

Q: Several military leaders have reportedly told Hegseth that a prolonged, large-scale operation in Iran weakens our ability to confront threats elsewhere, including the homeland. Have you heard that?

TRUMP: We’re very respected. Nobody else would be crazy enough to do it… We have unlimited amounts of… older stuff.

And then on Wednesday in formal remarks Treasury Secretary Scott Bessent blasted the media for its recent coverage. He went so far as to scold the media for being the best allies that the Iranians have. Pentagon chief Pete Hegseth has over the past months made similar remarks, invoking themes of ‘treason’.

“One of the best allies that the Iranians have on this is the media because the media immediately publishes all the lies that they say,” Bessent had proclaimed at the G20 meeting in Asheville. 

“Everyone in this audience and every news outlet should be ashamed for publishing that, taking a lying regime at face value,” Bessent added.

Bessent on Iran:

One of the best allies Iran has is the media.

The media immediately publishes all the lies that Iran says.

There are no mines in the strait. Two ships did not hit mines. pic.twitter.com/SdhyOOye1B

— Clash Report (@clashreport) September 1, 2026

Bessent has given other statements this week advancing Bush-style “you are either with us or against us” talking points related to the Iran war.

The Iran war this week reached the six-month mark, after White House officials initially repeatedly sought to ‘assure’ Americans it would be a four to six week operation.

All the way back in May, Trump rebuked a well-known NY Times reporter for a line of questioning that the president framed as “treasonous” coverage of the “victory” accomplished by the United States.

“I had a total military victory. But the fake news, guys like you, write incorrectly. You’re a fake guy. We had a total military victory. I actually think it’s sort of treasonous what you write. You should be ashamed of yourself. I actually think it’s treason,” Trump had told David Sanger at the time aboard Air Force One.

Authored by Bill Bonner via DailyReckoning.com,

We begin this week’s perambulations with a stroll into the future.

So far…the Bubble in the US is broader than any in history. It has been inflating everything it touched for the last 30 years.

All bubbles pop, of course. How they pop is the confusing whirlwind we enter today.

But don’t worry. Even in the worst crash, real wealth doesn’t disappear, it just changes hands. When the stock market goes down, those with stocks have less paper wealth…and less of a claim on real wealth. They are ‘poorer.’ That leaves those without stocks relatively richer. They have a bigger claim on the real goods and services the economy produces.

The feds and their elite cronies have a good racket going…diddling markets so as to shift more and more wealth away from the public and towards themselves. They own most of the capital assets…and they control the US budget. Pressuring interest rates lower, and backing up the stock market with bailouts and ‘put’ options…they’ve gotten richer and richer. As we saw last week, at today’s prices the stockholding class can theoretically buy twice the GDP…and have $10 trillion left over.

It wasn’t capitalism that made them so rich; it was a corrupt money system. And if the dogs of capitalism were unleashed, they’d have their fake money fortunes for dinner. Interest rates would be set by honest savers and borrowers — not by Fed policy decisions. Prices would be determined by buyers and sellers; the budget would be balanced; the debt would be cleaned up; the troops would come home; inflation would disappear; and the Baltimore O’s would win the World Series.

But of course, we’re dreaming.

Sticking to the real world…

Our high confidence guess is that the bubble will deflate. Everything will fall in price. Then, the feds will panic. They will do ‘whatever it takes’ to stop markets from doing their work — with more fake money, lower interest rates, yield curve control, quantitative easing. And probably some tricks we haven’t heard of yet.

After an initial sell-off, gold will go up. It will sniff out what is coming — more inflation. Other real asset prices too — from hot dogs to hotels — will get a whiff of the coming price hikes. Consumer prices will rise as ‘inflation expectations’ increase.

The feds really only have one tool — fake money. In a crisis, they will produce more of it…a lot more. And, in addition to the quantity of money coming into the economy, there’s another key inflation variable: the velocity of money. A dollar spent two times in a year is counted twice.

When people think the feds are going to print money, the dollar becomes a hot potato. They aim to get rid of it as soon as possible. Sales go up in the short run. In the longer run, the economy is destroyed.

And here’s an important addendum. We say ‘inflate or die.’ But those are just policy choices. In the long run, you can inflate all you want. The bubble will still die — a later, more gruesome death.

In the fight between markets on one side…and politicians, grifters, fixers and central planners on the other…markets always win, eventually. They win by deflation.

Even in an inflationary blow off — with prices soaring — real prices fall. Consumer prices rise, in nominal currency. But gold — real money — typically rises even more…so that in gold terms, real things actually become cheaper. Prices deflate in real terms.

Observers in Germany’s record-setting hyperinflation remarked that foreigners were able to use dollars — then, backed by gold — to buy things at absurdly low prices. By November, 1923, a dollar was equal to 4.2 trillion marks. This made American visitors trillionaires (in marks) allowing them to buy whole houses for the price of a magazine subscription. In real terms, prices had deflated down to almost nothing.

We witnessed it, ourselves, in Argentina. In pesos, consumer prices more than doubled every twelve months…but dollars (even with a dodgy dollar) made them cheaper than ever. We would go to a restaurant, for example, and feel guilty about paying so little for such a good meal.

The same phenomenon is already taking place in America, too. Housing has gotten much more expensive, right? And the stock market is much higher too, right? But looked at in terms of gold, stocks are less than half of what they were worth in 1999…and the Case-Shiller Home Price Index, expressed in gold, shows house prices down about 80% over the last quarter century.

The Case Shiller Home Price Index, in gold terms, has fallen around 80% in the last 25 years.

In real terms, all bubbles deflate…but you need real money to see it.

The Netherlands’ central bank transferred nearly 90 metric tons of gold bars from the United States and Canada to Britain amid growing concerns of “increasing geopolitical unrest,” according to CNBC.

“With this relocation, we have improved the tradability of our gold reserves. We expect that we will never need to use them, but we do need to strengthen our resilience and preparedness,” DNB Governor Olaf Sleijpen said of the development.

Roughly 25% of the gold reserves stored in New York and Ottawa were moved to London over the summer.

CNBC reports:

The transferred gold is now stored with the Bank of England because gold stored there must meet international trade standards and is recognized as “the world’s most easily tradable gold,” DNB said, adding that the move strengthens its “crisis preparedness.”

By contrast, DNB said the gold bars held in the U.S. and Canada could not be utilized as quickly and directly in a crisis situation.

The bank holds 30.8% of its 612.4 tons of gold reserves at its cash center in Zeist, southeast of Amsterdam.

“Keeping a larger share of the gold reserves in London strengthens the function of gold as an anchor of trust,” the Dutch central bank said.

Preparations to move the gold were not disclosed until the process was completed because it was a matter of vital public interest, Finance Minister Eelco Heinen said in a statement.

The Dutch central bank is not the first major European institution to shift gold out of the U.S. in recent years.

In 2025, France’s central bank pulled 129 metric tons of gold, then valued at $15 billion, from U.S. vaults and replaced it with newer, high-quality bullion held in Paris. At the time, Francois Villeroy de Galhau, then-governor of the Banque de France, claimed that the move was not politically motivated.

“The residual portion of the stock, amounting to 129 tonnes or 5% of the total, which was held in New York, did not meet this standard. Rather than embarking on a lengthy and risky logistical operation, the simplest solution was to sell this gold and then buy back gold of the highest standard in Europe,” the French central banker said in a statement.

“The sale of these US gold bars generated an exceptional capital gain of EUR 11 billion in 2025. This capital gain was duly recorded in the Banque de France’s accounts and therefore belongs, along with the Bank’s very sound net equity (EUR 283 billion), to all French citizens. France’s gold reserves stand at 2,437 tonnes and will remain unchanged.”

Meanwhile, advocacy groups in other major EU countries have voiced similar ambitions. Michael Jager, who heads the European Taxpayers Association, has pushed for Germany to bring its gold home, saying “Trump is unpredictable” and that the metal was “no longer safe” in the U.S., according to the New York Post.

The sums involved are substantial.

The Bundesbank holds roughly 3,350 metric tons of gold, of which 1,236 tons, roughly 37%, sit in New York.

However, Bundesbank President Joachim Nagel has dismissed the notion that the New York holdings are at risk.

“I have no doubt that the gold is safely stored at the Federal Reserve in New York,” he said in an interview with WELT earlier this year.

“Eventually, the US would hurt itself most if it were to call that legal status into question in any way and thereby put the confidence of financial markets at risk.”

The recent acceleration in geographical shifts of the location of central banks’ precious metal hordes has not been lost on Goldman Sachs who recently noted that “The location of central bank’s gold holdings appears increasingly top of mind for reserve managers.”

In an excellent note from Lina Thomas (available here in full for pro subs), she begins by noting that “the location of central bank’s gold holdings appears increasingly top of mind for reserve managers.”

The Bank of England remains the most popular custodian (preferred by 57% of reserve managers in the World Gold Council survey), with the New York Fed also important, because gold there sits in the main settlement networks and can be used for swaps, leasing, and immediate market access.

The trade-off is political risk – freezing or restricted access, as with Venezuela’s gold at the BoE in 2018.

Thomas also notes that full repatriation is not the default solution: domestic vaults are costly for smaller banks and swap one set of risks for another.

Instead, many banks are spreading holdings across jurisdictions (BoE, NY Fed, BIS, Banque de France, and increasingly China) to keep liquidity while reducing single-jurisdiction exposure.

However, amid all this location-shifting, it remains clear that central banks are anxiously holding on to (if not adding to) their gold hordes and Goldman Sachs’ NowCast puts June central-bank buying at 57 tonnes (about 100 tonnes a month on a 3-month seasonally adjusted basis, versus a pre-2022 average of 17 tonnes), with China the largest identifiable buyer.

A 32-tonne inflow of monetary gold into London looks more like a custody transfer than sales, given a 98-tonne rise in foreign official holdings at the BoE.

With all that said, Goldman maintains its $4,900/oz end-2026 forecast, assuming roughly 50 tonnes a month of official buying in 2026 and 40 tonnes in 2027, driven by EM reserve diversification after the 2022 freeze of Russia’s assets.

Gold has already rebounded about 10% from its mid-July low back above $4,400 today (near the 200DMA) as investor demand (ETFs, COMEX positioning, and options) recovered once markets scaled back Fed-hike expectations.

Professional subscribers can read Goldman’s full “Precious Comment: Gold and Central Banks: Storage Dilemma; Buying Trend Picks Up” note here at our new Marketdesk.ai portal

Following the mixed/weak Manufacturing PMI survey data earlier in the week, today’s Services PMIs were expected to be just as mixed with S&P Global higher and ISM flat.

• S&P Global Services PMI for August rose from 54.6 to 56.5 (below the preliminary 56.8 but still up bigly) – the highest since Dec 2024

• ISM Services PMI for August rose from 54.1 to 55.4 (better than the 54.1 exp) – the highest since Feb 2026

These improvements come as hard data languishes…

The S&P Global US Composite PMI recorded 56.0 in August, up from 54.5 in July and pushed the index to a 52-month high. A stronger rise in services activity coincided with sustained, albeit slower growth in manufacturing. This puts the US economy ahead of the rest of the world based on survey data…

“Business activity growth across the private sector accelerated in August, marking a clear shift in gear for the US economy,” said Usamah Bhatti, Economist at S&P Global Market Intelligence.

Survey data now point to GDP growing at an annualized rate of 3.0% in the third quarter, up solidly from the meagre 1.5% recorded in the previous quarter…

Alongside a renewed improvement in new business intakes, growth appears likely to continue at least in the near term.

“There was also a welcome acceleration in jobs growth during August, with employers becoming more confident across both the manufacturing and service sectors.

Job creation was commonly linked to efforts to keep pace with demand requirements, but also to prepare for future growth as concerns regarding the conflict in the Middle East started to fade.”

That said, Bhatti points out that “supply delays remained elevated, notably for manufacturers, while aggregate price pressures also stayed above their historical average.“

Growth momentum appears to have shifted from manufacturing to services, with the latter seeing the pace of expansion surge to the highest since the end of 2024.

“Manufacturing growth, meanwhile, was unchanged as both output and new orders rose at weaker rates.”

Is strong growth and elevated prices enough to trigger Warsh to pull the trigger in two weeks? Waller’s comments this morning dampened the market’s enthusiasm for a hike.

Authored by Ed Dowd via ‘Beyond the Narrative’ substack,

On August 19th the Treasury announced it would increase the size of its nominal long-end liquidity support buybacks beginning September 9. The long end yields declined on the headline. Cue the usual chorus of X hot takes: stealth QE, yield-curve control lite, money printing etc.

The reality is much less bombastic…it is mostly a jawboning exercise.

The Treasury Is Not the Fed…The Treasury Cannot Create Money

Buybacks of this type are a recycling operation. You issue more bills and notes on the front end and you take some longer paper off the street. You can tidy up liquidity in off-the-run issues. You can send a signal that you would prefer the 30-year not print a fresh multi-decade highs on a Tuesday. What you cannot do is print reserves, expand the monetary base, or run a proper balance sheet policy the way the Federal Reserve can. Confusing the two is how people talk themselves into thinking a few billion of “liquidity support” is 2020 all over again.

The size tells the story. Coupon supply at the long end is still large. Doubling a buyback program that was already small relative to annual issuance is, at best, a band-aid. Markets gave it a day. Then they remembered the calendar. The signal from Bessent is not nothing but it is not as big as it seems in the broader picture.

Who is actually in charge of the long end of the yield curve? It is not the Fed. It is not Scott Bessent’s operations desk. It is priced by growth expectations and inflation expectations or said differently the boom/bust cycle.

Who is in charge of that? The laws of nature and God.

Bessent Will Get Lower Yields…He Won’t Like Why

Bessent will get lower long end yields eventually, however he won’t like the reasons why. That is not a shot at the man. It is a description of the cycle. You can rearrange the maturity mix. You can jawbone fiscal consolidation.

You can tell reporters that yields do not reflect fundamentals. None of that overrides a growth scare once the growth scare arrives. That reality is not what Bessent or Trump want to manifest especially before the midterm elections.

Look at China if you want the preview: bond yields collapsing because the economy is in a disinflationary grind, not because Beijing discovered a clever buyback program.

Three Pillars of Risk: Growth Scare Ahead

At Phinance Technologies we put our US economic outlook on paper in January. An Emerging slowdown with yields set to drop starting in 2026. A deflationary scare is on the horizon. The risks outlined below are not exotic.

They are the white swans sitting on the lawn.

• Housing: Roughly 20% of GDP. Forty percent of CPI when you let the shelter component speak. Home prices still too high…call it 30% on our work. New home data has been ugly for months. Builders talking about persistent headwinds with high rates, affordability and cautious buyers. The border closing removed a bid that was quietly holding up rents and prices in a lot of metros. That floor is unwinding slowly, which is how housing always dies…not a bang…a rollover. Southeast first, then the map fills in. A frozen housing market is a frozen chunk of the real economy whether the S&P is making a high or not.

• The AI bubble peaking: In my post on July 23rd I outlined that the AI Capex party was approaching closing time. First the private credit market is undergoing flow issues and credit stress making financing more expensive. Since that post Nvidia confirmed those issues on their recent earnings call by disclosing that their balance sheet exploded with extra commitments to suppliers and sweeter payment terms to their customers. They want to become a bank to their customers much like Lucent did in the dotcom days, which did not end well for Lucent. Second Enterprise demand is cracking with ROI skepticism and token pricing backlash. Third power constraints are hitting hard with the grid needing massive additional supply that won’t be ready in time for the proposed amount of datacenter projects announced. Finally there is open-source pricing pressure as many users are embracing cheaper models. They call them capex cycles for a reason. The order book always gets inflated near the top, credit is always the disciplinarian.

• China entering acute phase of crisis: Factory of the world with fixed-asset investment falling, construction in contraction, real estate still working off a multi-year start collapse, and demographics that do not bottom until 2032. Contagion does not need a press conference. It eventually shows up in Asian supply chains, commodity demand, and the global credit impulse decelerating.

Bottom Line

Put those three looming risks on the table at the same time and Bessent will get lower long-end US yields. This is currently not consensus thinking but as the risks manifest themselves and the business cycle exerts its natural downturn the narrative will quickly change. The US long bond is the scoreboard and we believe soon it will begin to respond to these headwinds as we roll through the rest of the year and into the next. In hindsight the current Bessent intervention will be seen as ironic.

The Treasury is not the Fed. The Fed is not the long end. The long end is the cycle.

The signs are not hiding. They are just inconvenient for the people who need the narratives to keep the party going.