In a nutshell, Donald Copperfield’s latest act of diplomacy saw him conjure yet another round of Russian sanctions while quietly cancelling his grand Budapest “peace summit”—proving once again that illusion, not resolution, is Washington’s true foreign policy.

While Washington’s shutdown circus drags on, the U.S. Treasury quietly slipped out $66 million in a 19-year, 10-month note (CUSIP UN6). The auction’s high yield of 4.506%—up from 3.953% last month—managed to stop through the When-Issued rate by 1.2 bps, marking its first clean win since July after two lackluster, tailing auctions.

The bid-to-cover ratio jumped to 63.6% from 56.4%, though it still trailed the six-auction average of 67.3%. Direct bidders took 26.3%—a touch above their 23.1% norm—while Dealers ended up with 10.0%, roughly matching the 9.6% average.

Overall, this was a surprising auction, as most investors seem unaware that in the coming Trump stagflation—fueled by wars and shortages—the “risk-free” asset is no longer free of risk.

The ninth CPI print of this so-called Jubilee Year made its grand entrance at +0.3% MoM—just cool enough for economists to pretend they saw it coming. Year-on-year inflation tried to look humble at +3.0%, a hair below forecasts but still puffed up from last month’s 2.9%. Energy stole the show again, food kept pace, and goods refused to chill. Services? They barely lifted a finger—slowing from +2.17% to +2.09% in what can only be described as the world’s most boring coffee break.

Core CPI in September also came in a tick softer at +0.2% MoM—slightly weaker than August but still miles from the Fed’s mythical 2% target. On a YoY basis, it flatlined at 3.0%, the economic equivalent of pressing snooze on inflation. Core services—now 76% of the inflation buffet—cooled to 2.63% YoY, while core goods stubbornly refused to cooperate for the sixth month in a row. That makes 64 consecutive months of core CPI gains. But don’t worry—only people who eat, drive, or breathe should care.

A real treat for the “inflation is dead” fan club: Owners’ Equivalent Rent—the undead zombie of CPI—shuffled in at +3.8% YoY, barely cooler than August’s +4.0%. It’s the “coldest” reading since December 2021, which is a bit like bragging your fever dropped when you are on the way to the ICU.

And just to keep the propaganda machine humming that “inflation is a problem of the past,” SuperCore CPI—the Fed’s favorite vanity metric—came in at 3.18% YoY, its first tiny deceleration after four months of reheating. Translation: not a victory lap, just a smoke break. But sure, inflation’s dead—if you squint hard enough, ignore rent, food, goods, and reality, and take another generous hit of pure, uncut ‘hopium’.

September’s CPI confirmed what anyone with a shopping cart already knew: the Trump Reflation Express is chugging along as the US economy is heading into the ‘Trump Stagflation’. While the “Manipulator in Chief” and his Fed sidekick pop champagne over their imaginary 2% target, real inflation is still jogging around 3.2% YoY. But sure, let’s call it a win—nothing screams success like shrinking margins and taxing consumers with a grin.

Instead of daydreaming about 2% inflation like it’s a Disney fairy tale, seasoned investors—unlike the PhD troupe at the Fed—can actually count:
• To hit that mythical target, CPI would need to moonwalk below 0% every month—good luck pulling that off in a tariff-choked, WW3-flirting world.
• At the current 0.2%+ prints, we’re gliding toward 3.5%–4.5% CPI by year-end.
And when that reality check hits, not even Donald Copperfield sawing the “Central Banker in Chief” in half will hide the fact that cutting rates into an inflationary boom might be the Fed’s dumbest magic trick yet.

In a nutshell, September’s CPI was another masterclass in delusion—headline inflation cooled just enough for the Fed’s PhD circus to pop champagne, while real prices keep climbing and the “Trump Stagflation Express” barrels ahead.

According to S&P Global’s latest flash PMI, the U.S. economy is apparently sprinting into Q4, with the composite output index jumping to 54.8 — a level that screams “expansion,” at least on paper. Factories are booking the most orders since early 2023, and service providers are reportedly buzzing, though manufacturing jobs slipped and service hiring barely budged. Prices paid remain high, selling prices are cooling, and export demand is shrinking — but never mind the contradictions.

In a nutshell, the U.S. economy is “booming” again—if you overlook weak hiring, shrinking exports, and factories drowning in unsold goods.

While the “CP-Lie” keeps insisting inflation is a ghost of the past, American consumers seem to be living in a different reality—one where grocery bills still sting, gas prices bite, and economists keep telling bedtime stories about “transitory” inflation. The University of Michigan’s sentiment index just sank to a five-month low, with households expecting prices to rise nearly 4% over the next decade. Sure, official data claim inflation “eased,” but cereal and coffee costs are still creeping up while gasoline’s back on its usual joyride. In short, the only thing truly deflating these days is consumer confidence.

In a nutshell, despite the government’s fairy tales, consumers aren’t buying the propaganda—prices still sting, gas still bites, and confidence just tanked to a five-month low.

A few days after Fitch, Moody’s gently tapped the perpetually floundering French government on the shoulder to announce a “negative” outlook, while graciously reaffirming the Aa3 rating—a figure more cosmetic than comforting, designed to make investors feel slightly better about the republic of debt. Moody’s sniffed ominously that if the delay on the oh-so-controversial retirement-age hike from 62 to 64 drags on for years, France’s fiscal headaches will only multiply, and the economy’s growth potential might get a polite kick in the pants. Somehow, this illusion of stability keeps France sitting seven notches above junk, rubbing elbows with the UK and Czech Republic in the high-rated fantasy league.

🤵 The Macro Butler Weekly Digest 🤵

🌐 When ‘Educated Yet Idiots’ run the show, bonds crumble, cash loses trust—and the Banana Republic Portfolio of stocks & gold thrives. 🌐

Read more here: https://themacrobutler.substack.com/p/the-banana-republic-portfolio-the

Listen to a summary of The Macro Butler weekly newsletter via podcast on Substack; YouTube; Rumble & TikTok.

https://themacrobutler.substack.com/p/the-banana-republic-portfolio-the-58f

The Macro Butler grabbed a coffee with Metals and Miners to discuss why bonds and other “promises to pay later” have become financial poison in a world run by the Educated Yet Idiots.

The verdict? When the EYIs run the circus, you’d better own the Banana Republic Portfolio—an equal blend of stocks and precious metals—because no matter where you live, reality eventually catches up with paper promises.

Grab a coffee, polish your gold bars, and enjoy the show.

https://themacrobutler.substack.com/p/interview-with-metals-and-miners-299

Stablecoins are finally having their “real-world moment.” Since Donald Copperfield waved his pen over the Genius Act in July, dollars-on-the-blockchain have been zipping around faster than ever. Over $10 billion in stablecoins changed hands in August — almost double last year’s pace. Sure, it’s still pocket change next to Visa or Mastercard, but the growth curve looks like it just slammed a triple espresso.

Businesses are leading the charge, too. B2B payments now hit $6.4 billion a month, up 113% since February — the first time companies have outpaced consumers. Why? They’re done with the “send-to-this-bank-that-sends-to-another-bank” relay race. With an average ticket size of $250,000, speed matters. Even Zelle is joining the party, using stablecoins for global transfers. When the old system moves like dial-up, blockchain’s looking like Wi-Fi on steroids.

In a nutshell, America’s in its “Stablecoin We Patch” era — plugging the holes of a creaky banking system with blockchain band-aids, as businesses ditch slow wires for instant, digital dollars.