TAG Industrial Watch: September 19, 2026

Since the moment Kevin Warsh assumed the role as the chairman of the Federal Reserve in May, he has held an aggressive stance on fighting inflation. However, it took three committee meetings for the Fed to finally raise interest rates on bank-to-bank lending by a marginal 25 basis points. In 2025, the Consumer Price Index rose by 2.7%, 70bps above the Fed’s target. With four more months to go, the CPI has already risen by 2.5% year-to-date and is on pace to top 3.7%. With gas prices poised for another jump, led by a historic diesel shortage, the CPI could easily finish the year above 4.0%. Given that the CPI is speeding up by 100bps and counting, it’s hard to imagine that a 25bps increase will do the trick.

More importantly, regardless of how much the Fed meagerly hikes rates on one hand, our central bank is inflating the money supply to buy U.S. Treasuries on the other hand. Quiet as kept, the Fed has purchased $363 billion in Treasuries since reversing course last December to keep rates from rising. Unfortunately, the Fed’s inflation has added fuel to rising prices, which in turn has incentivized bondholders to sell, pushing up interest rates and putting the Fed in a position to purchase more Treasuries. As a recent article by GlobeSt.com points out, CRE investors should not count on a return to low rates. Instead, CRE investors should move decisively to sell or acquire properties before mortgage rates potentially move much higher.

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