Every business runs on two prices: what it costs to borrow money and what it costs to move things. Today (September 23, 2026), both flashed warnings at once. The federal government had to pay up to sell $70 billion of five-year notes, and the ten-year Treasury yield climbed to its highest level since 2007. Around the same time, a report surfaced that the administration was preparing a 90-day ban on diesel exports, with diesel prices already at record highs. The White House, of course, denied it within hours. Energy Secretary Chris Wright said nobody was considering a “flat” ban, which is the kind of adjective that invites a second reading. And at the United Nations, Iran’s president blamed the United States and Israel for the world’s instability, seven months into a war that has choked the most important oil route on earth.
Yesterday I published an essay called “The Cost of Living on Standby,” about the strange exhaustion of waiting for something decisive to happen. I compared the past year to the stretch of a horror film when the music changes but the room stays the same. People joke that nothing ever happens. I didn’t expect the room to start moving the next morning.
Most people will read today as three unrelated stories, one for the bond desk, one for the energy desk, and one for the foreign desk. I read them as one, partly because of where I sit. The SBA portion of a 504 loan, the kind B:Side makes, is priced at a spread over Treasury yields, so a bad afternoon in the bond market eventually becomes a fixed rate that a machine shop or a family restaurant carries for twenty years. Plenty of the business owners we work with never buy diesel directly. They pay for it anyway, in freight, in food, and in the price of every part that arrives on a truck.
There’s a line in Macbeth that describes how this kind of trouble travels. As Macbeth approaches, one of the witches says, “By the pricking of my thumbs, / Something wicked this way comes.” She feels him before she sees him. Economic damage announces itself the same way, as a sensation in fuel invoices, renewal letters, and supplier price sheets, months before anyone sees it in the GDP report. The signs are there for anyone willing to read them.
I also have to hold myself to what I wrote yesterday, where I warned that a crisis framework can turn every bad afternoon into proof of the end. So I’ll be precise about what I’m claiming. I can’t give you a date or a depth. I do think it’s going to get rough, and I think most of the damage will surface in places the headlines aren’t watching yet: loan renewals, fuel surcharges, and the margins of businesses that look perfectly healthy today.
The Price of Money Moved First
The Treasury sold every note it offered. The trouble was what it had to pay. To clear the sale, the government offered a better yield than the market expected, and the buyers who usually show up in force, including foreign central banks, took a noticeably smaller share. Dealers, who are expected to bid at every auction and absorb whatever others pass on, were left holding more than usual.
One auction on a jumpy day proves very little. The trend underneath it matters more. Over the past year, foreign investors added roughly a fifth as many Treasury bills as they did the year before. They’re still buying, just far less, while Washington keeps selling more. The only way to attract a buyer who wasn’t planning to show up is to pay them more.
A yield spike can fall off the front page long before it falls out of a borrower’s cash flow. Existing fixed-rate debt doesn’t care what happened this week, but every year a large share of the economy’s debt comes due and gets replaced at whatever the market charges. Take a company that borrowed $5 million at 4 percent a few years ago and now has to refinance at 7. Before fees or amortization, that’s $150,000 a year in additional interest, which is a couple of salaries or the down payment on the equipment it meant to buy. We’ve been having versions of that conversation with borrowers since spring.
The squeeze now comes from both ends. The Federal Reserve raised rates last week for the first time since 2023, which lifted the prime rate that most variable-rate 7(a) loans follow. Now the long end has moved too. For most of the last two years, a borrower could at least hope one end of the curve would offer some relief. This month both ends moved against them.
A Dozen Ships a Day
The war is now in its seventh month. Iran closed the Strait of Hormuz at the end of February after American and Israeli strikes, and a ceasefire in June held for only a few weeks. The American blockade of Iranian ports has been back in force since mid-July. Before the war, roughly a hundred ships a day moved through the strait. In early September, while Washington insisted the waterway was fully open, ship-tracking firms were counting about a dozen.
Today Iran confirmed indirect contact with Washington through Qatari mediators, the first since the ceasefire fell apart, and in the same breath said its demands hadn’t changed: end the blockade and release Iran’s frozen assets. The President has said he hopes the war is nearing its end. I hope so too. Even a signed agreement wouldn’t clear the water overnight, though. Crews had pulled more than a hundred mines from the strait by late August, and shipowners, insurers, and refiners all come back on their own schedules.
The Whole Barrel Comes With the Order
The diesel shortage is months older than today’s report. Refineries were running at about 97 percent of capacity in mid-September, and inventories still sit well below normal for the season. Reduced refining in Russia, China, and the Middle East has tightened the global market and pulled American barrels overseas. The plants are working as hard as they can, and there’s very little in the tank for a bad week.
The export idea has an intuitive logic: keep American diesel at home and domestic prices fall. For a few weeks that might even happen along the Gulf Coast, where cargoes bound for Brazil, Mexico, or Europe would suddenly have nowhere to go.
The second round is where it goes wrong, and a butcher explains it better than an economist. Nobody raises a steer that’s all ribeye. The whole animal comes with the order. A refinery works the same way: crack a barrel of crude and you get gasoline, diesel, jet fuel, and a list of other products in proportions that can only be adjusted at the margins. A refinery that loses its export buyers and fills its tanks can’t simply switch off the diesel. It has to run less crude, and less crude means less gasoline and less jet fuel too. Wright himself has warned that a ban could raise gasoline and jet fuel prices. Geography adds insult: a surplus in Houston does very little for a trucking company in New Jersey if the pipeline between them is already full.
Which makes today’s sequence telling. A plan the Energy Secretary had already argued against leaked anyway, and within hours the White House was denying it. That kind of whiplash usually signals pressure. The midterms are six weeks away. Diesel averaged $6.51 a gallon on Monday, nearly double what it cost a year ago, and nobody has to follow energy policy to notice what it costs to fill a tank or a grocery cart. The administration is desperate to keep things afloat until November. I understand the impulse, and I’d expect more ideas like this one: measures that look good for a news cycle and do very little about the barrels. The shortage was here before this week, and it will be here after the votes are counted.
Where the Stories Meet
Expensive fuel raises the cost of producing and moving nearly everything, and repeated shocks leak into wages, contracts, and expectations. That leaves the Fed in the bind its own vice chair, Philip Jefferson, described this summer: a supply shock pushes prices up and employment down at the same time, and the tool that fights one worsens the other. Chair Kevin Warsh has chosen to fight the prices, election season or not. And the Fed controls the ten-year yield far less than most people assume. Investors set it, and they demand more when they doubt inflation is contained or worry about how much debt Washington has to sell.
So the loop runs like this. Fuel keeps inflation elevated. Inflation keeps relief off the table and long rates high. High long rates raise the cost of every mortgage, equipment loan, and refinancing just as fuel has drained the cash borrowers would use to pay them. Each pressure is manageable on its own. Together they take away the room people normally use to absorb the other one. S&P Global’s September outlook sketches nearly this exact chain as its downside case, with a milder base case. I’d like to believe the base case. Every week this month has made that harder.
Now, I know what some of you are thinking. The economy is booming. Business surveys released today show activity growing at its fastest pace in more than five years, and anyone predicting a collapse has to explain that. Read the rest of the same survey, though. Input costs jumped at the steepest rate in four years, with fuel and transport singled out, while competition kept companies from raising their own prices as fast. Businesses are busy, their costs are rising faster than their prices, and the difference is coming out of margin. Think of a regional carrier whose fuel surcharge lags its diesel bill, a grower financing harvest on a pricier operating line, or a distributor paying more to haul inventory in and more to carry it on the shelf. All of them are solvent. All of them end the month with less cash than they planned. Activity data are the last place that kind of damage appears.
What I Expect Next
Warnings are cheap without markers, so I’ll put some down.
The damage will arrive through renewals, well after the headlines move on. Most of the debt that matters on Main Street reprices on a schedule: equipment notes, credit lines, commercial mortgages written when money was cheap. The businesses that feel this in 2027 are signing term sheets now, and plenty of them haven’t run the numbers at today’s rates.
The improvising will get louder through November. Expect more trial balloons on fuel, more pressure on whoever can be blamed for prices, and more announcements timed to the news cycle. A refinery will crack the same number of barrels, and the same dozen ships will cross the strait. After the election the incentive to improvise fades. The shortage will still be there.
The Fed will disappoint anyone waiting for a rescue. A central bank that just raised rates into an energy shock is unlikely to reverse quickly, and even a cut can’t pull down a ten-year yield that investors are setting on their own terms. The relief many borrowers are planning around will come later and smaller than they hope.
The first cracks will show where margins are thin and fuel is a real line item: trucking, agriculture, distribution, restaurants, construction. Many of those are exactly the businesses community lenders like us serve, which is why I’d rather sound the warning early.
And the owners who prepare now will get something rare in a hard stretch: choices. The ones with cash, fixed-rate debt, and honest numbers will be the buyers of equipment, talent, and market share from competitors who waited too long. In my experience, hard cycles hand their best opportunities to the people who got ready before they had to.
Give the Uncertainty a Shape
Yesterday I argued that uncertainty needs a shape: an owner, a review date, and permission for everyone else to stop refreshing the same screen. For a business owner this fall, the shape is unglamorous, and it’s easier to build before the pressure arrives.
Know every date. Put every loan maturity, rate reset, lease renewal, and credit line review for the next twenty-four months on one page. Most owners know their rates. Fewer know their dates, and the dates are where this environment bites.
Talk to your lender early. A borrower who calls six months before maturity with current financials is negotiating. One who calls six weeks before is asking for a favor. If refinancing makes sense, do it from strength; if it doesn’t, work through extensions, amortization, or a partial paydown while those options are still on the table.
Settle your fuel pass-through now. If your contracts carry surcharges, check how often they reset and how far they lag your real costs. If they don’t, decide what you’ll tell customers before you have to say it. Absorbing a cost you could have passed through is a choice, and it’s usually made by default.
Decide what you’d do with an opening. If a competitor stumbles or good equipment comes up for sale next spring, know now what you’d want, what it would cost, and what it would take to say yes quickly.
The Wood Is Already Moving
Later in the same scene, Macbeth takes comfort from a prophecy that sounds impossible to fulfill. He’ll be safe until Birnam Wood comes to Dunsinane, and forests don’t walk. Then the opposing army cuts branches from the wood and carries them as cover, and the forest moves after all. The danger arrives dressed as something ordinary.
This week’s reassurances have the same literal accuracy. The auction didn’t fail. The ban was denied. The strait is open. Talks are underway. The economy is growing faster than it has in five years. Each statement is true, or true enough for a press briefing, and none of them reaches the costs already moving through fuel bills, margins, and the rates people are locking this week.
The suspense I wrote about yesterday is starting to break, the way it usually does, through a run of ordinary bills and one more disappointing line on an auction report. I think it’s going to get rough, rougher than the growth numbers suggest and sooner than anyone on the ballot in November would like. The witch didn’t need to see Macbeth to know he was coming. Neither do you.
Nobody can tell you when the wood reaches the castle. You can know exactly when your note comes due.
P.S. Leading through a stretch like this, when the pressure is real and the timing is unknowable, is what my book Honor Under Pressure is about. Its companion site, thefourthturningleader.com, starts with the free Mode Finder, a five-minute assessment of how you tend to lead when the stakes rise.