Nassim Nicholas Taleb — whose published work moves between finance and probability theory — pushed back on the inflation assessment offered by Treasury Secretary Scott Bessent, arguing that forces such as oil-market dynamics, the scale of the federal deficit, and borrowing costs point to underlying pressures that headline figures do not fully reflect.
On Saturday, Bessent published a post on X taking aim at Senator Elizabeth Warren's "Trumpflation" tracker, drawing a response from Taleb on the same platform. Over the weekend, Bessent applied the label "Harvard Square inflationista" to Warren and characterised her tracker as distorting the underlying figures, while also releasing a counter-measure he called the "Trump Affordability Tracker," which put annualised core inflation at 2.5% across Trump's time in office against 4.7% under Biden, placed grocery inflation at 2.1% versus 5.3%, and showed cumulative real weekly wages up 1.5% compared with a 3.9% contraction in the preceding period.
Taleb noted that borrowing costs had climbed 20 percent, that the deficit was widening at a pace he described as accelerating, and that the effect of the oil price movement on core inflation — the measure that strips out food and energy — had yet to register. He also noted that grocery costs were putting pressure on household budgets as the winter period approached, and that the interconnected nature of today's global economy meant nations relied on energy imports to a far greater degree than they did in 1973.
Brent crude traded at $106.31 a barrel, a gain of 0.59%, while WTI futures added 0.63% to reach $94.73, with both benchmarks holding at elevated levels against a backdrop of ongoing armed conflict in the Middle East.
Data released by the Bureau of Economic Analysis placed the annualised August reading for the Personal Consumption Expenditures Index — the inflation measure the Federal Reserve treats as its primary benchmark — at 3.4%, coming in under the 3.7% figure analysts had projected. Stripping out food and energy costs, the core PCE gauge climbed 3.0% over the past year and 0.2% over the prior month, leaving it a full percentage point beyond the Federal Reserve's 2% inflation objective.
Forecasts from economists point to a September consumer price index reading of 3.6% at the headline level and 2.6% at the core level.
Benchmark rates for government debt told a mixed story: the 10-year note hovered around 4.206% after pulling back from a 24-year peak of 5.36% reached the prior week, while the longer 30-year bond held at 5.206%. Figures released by the Treasury Department put the federal deficit at roughly $1.96 trillion for the current fiscal year to date, with the national debt hovering around $40.28 trillion.
On Tuesday, the iShares 7-10 Year Treasury Bond ETF wrapped the regular session at $89.54, a gain of 0.12%, before adding another 0.13% once after-hours trading got underway; the longer-dated iShares 20+ Year Treasury Bond ETF posted a 0.41% advance to finish at $78.37, then edged up a further 0.05% in post-market activity.
