TAG Industrial Watch: October 24, 2026

Despite the eye-catching headlines, the news doesn’t tell the full story of how quickly inflationary forces are accelerating throughout the U.S. economy. Starting with the source of inflation, the M2 money supply was up 5.7% annually in August, inflating at the fastest pace since June 2022 (FRED). As TAG has pointed out many times before, inflation is being driven by the growth of the national debt, which deepened by another $2.5 trillion in the fiscal year that ended in September. Notably, the fastest-growing government expenditure in recent years isn’t the military or Social Security, but interest on the national debt. Including the interest paid to the trust funds, fiscal-year interest payments jumped to $1.36 trillion, trailing only Social Security’s $1.67 trillion expense as the second-largest line item, for now (U.S. Treasury).

The debt-driven inflation has resulted in pushing up the Consumer Price Index (CPI) by 4.0% in just the first nine months of the year, topping the year-over-year rate. Given that wholesale prices (a bellwether for future consumer prices) are rising at an even faster pace, the CPI will likely continue to accelerate through the end of the year, unlike in Q4 2025. Year-to-date, the Producer Price Index for all commodities rose by 13.2%. While the global oil shortage caused by the war with Iran is clearly having a big impact on countless prices, import and export prices show that America’s inflationary problems are partly internal. From January through September, the Import Price Index increased by 7.6%, trailing the Export Price Index that’s up 10.5%.

Simply put, the U.S. economy is facing a wave of inflationary forces as the economy continues to show signs of weakness. Ultimately, this will likely mean much higher interest rates, which should give industrial investors plenty of incentives to take advantage of today’s mortgage rates while they last.