Wâltêr Blôōmbērg @_Delta_one

U.S. MORTGAGE PAIN DEEPENS AS RATES NEAR 7% U.S. mortgage applications fell 4.1% last week to their lowest since May 2025, with refinancing applications plunging 8.8%. The 30-year conforming mortgage rate climbed to 6.97%, while jumbo rates jumped to 7.03%. Market angle: with market rates still rising, mortgage costs could climb further, intensifying pressure on housing demand and refinancing activity.

SK HYNIX INC: NO PLANS HAVE BEEN CONFIRMED REGARDING THE REPORTED TALKS BETWEEN SK HYNIX AND INTEL ON MEMORY CHIP PRODUCTION IN THE U.S.

WRIGHT: GETTING MORE FLOW THROUGH BAB EL-MANDEB STRAIT WOULD BE HELPFUL

*HOUSE DEMOCRATS SEEK BIPARTISAN AI SAFEGUARDS: POLITICO

U.S. 20-YEAR TREASURY YIELD HITS 5.42% The Treasury’s $13 billion 20-year bond auction cleared at a high yield of 5.420%, highlighting elevated long-term borrowing costs. Demand remained solid, with a 2.57 bid-to-cover ratio, while indirect bidders took roughly $6.8 billion. Market angle: persistently high long-term yields remain a major headwind for equities, housing and broader financial conditions.

CBO SAYS THE WAR IN IRAN COST THE U.S. $38 BLN IN THE FIRST FIVE MONTHS, ADDING THAT ITS ANNUAL PCE INFLATION PROJECTION IS NOW 0.5 PERCENTAGE POINT HIGHER FOR Q1 2027

YARDENI SLASHES S&P 500 TARGET Wall Street bull Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400, citing rising bond yields and increased downturn risks over the next 3–6 months. He lowered his expected forward P/E multiple to 18.6 from 19.8. Yardeni still sees 10,000 by 2030, but warns higher inflation and slower growth could pressure stocks near term.

🇺🇸 WHAT TO WATCH TODAY — U.S. MARKETS 8:30 AM ET — 🇺🇸 Retail Sales 8:30 AM ET — 🇺🇸 Import & Export Prices 10:30 AM ET — 🛢️ EIA Oil Inventories 1:00 PM ET — 🇺🇸 Treasury Auction 2:00 PM ET — 🏦 FOMC RATE DECISION + DOT PLOT 2:30 PM ET — 🎙️ Fed Chair Kevin Warsh Press Conference 🔥 FED — KEY EVENT The Fed decision and updated economic projections are the main event. The headline rate decision matters, but markets will focus heavily on the dot plot and the projected path for rates. Hawkish Fed → yields/USD ↑ → stocks pressured Dovish Fed → yields/USD ↓ → stocks supported 🎙️ WARSH — 2:30 PM ET Chair Kevin Warsh’s press conference could trigger a second wave of volatility. Watch his comments on inflation, oil, the labor market and the path of rates into 2027. 🇺🇸 RETAIL SALES The biggest U.S. data release before the Fed. A strong consumer print could reinforce expectations for tighter policy, while weakness could support a less aggressive Fed path. 🛢️ OIL EIA inventories arrive at 10:30 AM ET. With crude elevated, a large draw could push oil higher and reinforce inflation concerns. 🌍 GLOBAL WATCH UK CPI and Eurozone inflation are the main international releases ahead of the U.S. session.

NVIDIA CEO JENSEN HUANG: DO NOT NEED NEW LAWS OR REGULATIONS FOR AI SAFETY - SALESFORCE EVENT NVIDIA CEO: ON AI SAFETY, SAYS COMPANIES SHOULD PACE THEMSELVES UNTIL THEY ARE ARE CONFIDENT THEY ARE RELEASING SOMETHING THE MARKET WOULD APPRECIATE

OPENAI CFO FRIAR SAYS WILL PACE THE FRONTIER AND SLOW DOWN IF WE HAVE TO - CNBC

STOCKS RISE AS YIELDS RETREAT AHEAD OF FED Global stocks moved higher ahead of today’s Fed rate decision, with markets pricing more than a 90% chance of a 25bp hike. The S&P 500 gained 0.26% and Nasdaq 0.60%, while the 10-year Treasury yield retreated to 4.963%. Oil also cooled, with Brent falling 2.4% to $106. Market angle: attention now shifts entirely to Kevin Warsh’s guidance on future hikes.

FED DECISION DAY: MARKETS BRACE FOR A HIKE The Federal Reserve delivers its September rate decision, with prediction markets putting an 88% probability on a 25bp hike. What Wall Street expects Bank of America: September hike, with Waller expected to dissent. BofA sees the 2026 median dot at 4.1% and warns that a decision not to hike could put renewed upward pressure on long-end yields. Goldman Sachs: Sees limited economic justification for aggressive tightening, arguing that much of the inflation overshoot reflects factors that should fade. It expects some FOMC officials to be reluctant to signal additional hikes. UBS: Expects hikes in September and December, with Bowman and Waller dissenting today. Its 2026 median-dot forecast is 3.9%, followed by another 3.9% in 2027. Wells Fargo: Two 25bp hikes in the coming months is the base case, although a “one and done” outcome remains possible. kalshi.com/markets/kxfedd…

MARKETS MAY BE PRICING TOO MANY RATE HIKES Markets now expect four 25bp Fed hikes over the next year, taking rates to roughly 4.6%, as surging energy prices revive inflation fears. Traders also see the ECB reaching 3.25% and BoE 4.75%. Reuters Breakingviews argues expectations may have gone too far, as underlying inflation remains relatively contained and expensive energy could ultimately weaken growth rather than trigger persistent inflation.

IRAN CLAIMS HUNDREDS OF U.S. MILITARY SITES HIT Iran’s foreign minister rejected claims that Iran is defenseless, asserting that hundreds of U.S. military sites have been destroyed and dozens of aircraft damaged. He claimed the figures were based on Pentagon information and said Tehran will disclose additional details “in due course.” The claims were not independently verified in the statement provided.

MICHAEL BURRY JOINS NEW SHORT-FOCUSED FUND “Big Short” investor Michael Burry is joining Minerva Investment Management as senior adviser to help launch a new short-biased fund expected within a month. Burry has recently targeted AI hyperscalers and chipmakers, criticizing aggressive depreciation practices. He currently holds bearish positions on Nvidia and Palantir, bringing his growing AI skepticism directly into the new fund’s strategy.

WRIGHT: 18 MLN BARRELS FLOWED OUT OF PERSIAN GULF YESTERDAY

*VANCE AGREES WAR WILL END AFTER MIDTERMS: NY POST *VANCE SAYS IRAN WAR WILL ENTER ‘MUCH DIFFERENT PHASE’: NY POST *VANCE TO NYP: IRAN OCCASIONALLY SHOOTING AT COMMERCIAL SHIPPING *VANCE TO NYP: US NOT ENGAGED IN AGGRESSIVE OPERATIONS IN IRAN

*US AUG. RETAIL SALES RISE 1.2% M/M; EST. +0.8% *US AUG. RETAIL 'CONTROL GROUP' SALES RISE 1.4% M/M; EST. +0.5%

OPENAI ISSUING NEW ENDORSEMENTS FOR WEB OF BIOLOGICAL DATA ACT, AI-READY BIO-DATA STANDARDS ACT, SCALE BIOLOGY ACT - POLITICO

SEVERAL EXPLOSIONS HEARD ON IRAN'S QESHM ISLAND -IRNA CITING LOCAL SOURCES AS SAYING