Weekly Market Commentary

September 16, 2025

The Markets

What are your expectations for inflation?

Inflation occurs when the prices of goods and services increase. Last week, the Consumer Price Index (CPI) showed that inflation moved modestly higher from July to August. Prices increased 2.9 percent, year over year, remaining above the Federal Reserve’s long-term goal of 2 percent inflation. Overall, prices increased 0.4 percent, month over month, from July to August.

Grocery prices rose faster than other prices. The cost of fresh fruits and vegetables rose 1.6 percent from July to August, led by tomato prices, which were 4.5 percent higher. The cost of meat also rose faster than headline inflation, up 1.0 percent month over month, with a 2.7 percent rise in the beef index. In contrast, the price of sweet rolls, coffee cakes, and doughnuts fell by 2.3 percent month over month, and egg prices remained steady.

Why did food prices rise?

“Tariffs are a factor, but they are only one piece of the puzzle,” according to a restaurant-industry source cited by Megan Leonhardt of Barron’s. “Food costs are also climbing because of labor shortages in production and distribution, elevated transportation expenses, and weather events that disrupt harvests and livestock production.”

Consumers anticipate prices may increase further, according to the University of Michigan’s September Consumer Sentiment Index, which was released last week.

“Year-ahead inflation expectations held steady at 4.8 [percent], unchanged from August. Long-run inflation expectations moved up for the second straight month to 3.9 [percent] in September. This current reading is considerably lower than the 4.4 [percent] seen in April,” reported Surveys of Consumers Director Joanne Hsu.

Stock markets were undaunted by economic data.

Investors remained confident that weakness in the labor market would weigh more heavily in the Fed’s rate decision next week than inflation data would. “Markets have fully priced in a September cut and now anticipate three reductions this year, compared to two just weeks ago,” reported Indradip Ghosh of Reuters.

Market optimism pushed major U.S. stock indexes higher last week. Treasuries were mixed, with yields on the longest maturities of Treasuries ending the week near where they started it.

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

A SCARCITY OF READING. We live in an information-rich world where people spend hours perusing social media. There’s even a slang term to describe it: brainrot. The term “refers to material of low or addictive quality, typically in online media, that preoccupies someone to the point it is said to affect mental functioning,” according to the Merriam Webster dictionary

In the 1970s, Nobel Prize-winner Herbert Simon theorized that “the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently...”

Reading appears to be suffering from a poverty of attention

In 2004, about 28 percent of the 10,000 people who participated in the government’s “American Time Use Survey” read print or digital books, perused magazines, or listened to audiobooks for the pleasure of it, according to a 2025 research paper published in iScience. Twenty years later, just 16 percent did.

Falling literacy levels may affect the desire to read. The Program for The International

Assessment Of Adult Competencies (PIAAC) uses a 500-point scale to measure literacy and divides its assessment into six levels of literacy.

• Below Level 1, Level 1: In 2023, 28 percent of U.S. adults, ages 16 to 65, scored at these levels, a 10 percent increase from a decade earlier.
• Level 2. In 2023, 29 percent of U.S. adults scored at this level, down from 33 percent a decade earlier.
• Levels 3, 4, and 5: In 2023, 44 percent of U.S. adults were at this level, down from 50 percent a decade earlier.

When compared to the 31 countries and subnational economies that participated in the study, the U.S. ranked 14^th in literacy.

Reading skills affect economic growth

There is a significant relationship between reading and economic well-being, according to 2020 research conducted by Gallup and The Barbara Bush Foundation for Family Literacy. Gallup’s Principal Economist Jonathan Rothwell reported, “Eradicating illiteracy would have enormous economic benefits. This analysis finds that getting all U.S. adults to at least a Level 3 of literacy proficiency would generate an additional $2.2 trillion in annual income for the country. That is 10 [percent] of the gross domestic product.”

WEEKLY FOCUS – THINK ABOUT IT

“Libraries have always seemed like the richest places in the world to me, and I've done some of my best learning and thinking thanks to them. Libraries and librarians have definitely changed my life, and the lives of countless other Americans.”

– Barbara Bush, Former First Lady