Weekly · Inflationary shock and the shift in regulatory paradigms · September 20–26, 2026

Key points

Financial markets: inflation and interest rates

Against the backdrop of inflationary pressure and rising AI infrastructure debt, the yield on 10-year U.S. Treasury bonds rose from 4.943% on September 20 to 5.23% on September 26, reaching a high not seen since 2007. The 30-year yield reached 5.463% (a high not seen since 2004). One-year-ahead inflation expectations according to the University of Michigan data jumped to 4.6%. The probability of a Federal Reserve rate hike in October, according to CME FedWatch data, rose from 55% to 71%. Federal Reserve Chair Kevin Warsh, who has held the post for 127 days, abandoned forward guidance, leaving open the possibility of 5-6 rate hikes. The yield curve nearly inverted: the 10-2 year spread narrowed to 21 basis points.

In Japan, the yield on 10-year JGBs reached 3.055% (a high not seen since 1996), and 5-year yields hit a record 2.345%. In the United Kingdom, government debt reached 93.8% of GDP, and borrowing in August amounted to £18.3 billion, which is £3.5 billion higher than forecasts. The OECD lowered its forecast for UK economic growth in 2027 to 1%. The Swiss National Bank kept its rate at 0%, despite inflation rising to 0.8%, which led to a weakening of the franc and an increase in the spread with the ECB to 2.5 percentage points.

Energy crisis and sanctions

The war with Iran led to the closure of the Strait of Hormuz and record diesel fuel prices: in the U.S., the average price reached $6.53 per gallon, and in Europe — €2.159 per liter. Diesel exports from West Asia fell to a quarter of their pre-war level. Gas prices in Europe (TTF) reached $93 per MWh (a high not seen since January 2023), while gas storage in the EU is only two-thirds full. Qatar declared force majeure on LNG, losing 17% of its export capacity due to strikes on Ras Laffan.

In response to the crisis, the U.S. is considering a ban on diesel exports or an expansion of the use of red diesel. Russia extended the ban on diesel exports until October 31. The EU extended sanctions against Russia until September 22, 2029, covering more than 3,000 individuals and organizations, and agreed on a new list, excluding two billionaires. The U.S. signed the Graham Law on sanctions against Russian and Iranian oil. The UAE imposed sanctions on branches of Bank Melli and suspended air traffic with Iran.

Cryptocurrencies: a shift in regulatory course

Following the rejection of the Clarity Act in the U.S. Senate (49-50), cryptocurrency regulation shifted to agencies. The SEC issued a five-year exemption for trading tokenized U.S. stocks on the blockchain, limiting the volume to 0.25% for large companies. The CFTC sent a proposal to the White House regarding rules for crypto assets. The Federal Reserve opened a 60-day discussion on stablecoin rules under the GENIUS Act. In the EU, the ECB and EBA called for extending the ban on stablecoin yields to lending and staking. Bitcoin returned to its 50-week moving average ($78,115) for the first time in 45 weeks, while inflows into U.S. spot Bitcoin ETFs exceeded $800 million, recovering from a deficit of $5.8 billion in July.

Regulation of AI and data centers

Regulation of AI infrastructure is tightening in the U.S. and the EU. In Texas, permits for data center construction have been suspended until the completion of a grid audit, while in California, laws on energy consumption and water usage have been adopted. The EU introduced environmental labeling for data centers from A to G, which will take effect in August 2027. A New York Times survey showed that more than 60% of Americans are against the construction of data centers. Trump announced the creation of an "AI Force" and the position of "AI Czar," without specifying their powers. Meanwhile, AMD reached a market capitalization of $1 trillion, and Akamai signed a $12 billion contract with Anthropic for cloud computing.

Geopolitics and security

In Ethiopia, seven rebel groups formed an alliance to overthrow the government of Abiy Ahmed, and combat operations spread to the Afar and Amhara regions. In Russia, United Russia received a record 349 seats in the State Duma amid massive drone attacks on Moscow. In Germany, the CDU failed to cross the 5-percent threshold for the first time in history in the elections in Mecklenburg-Vorpommern, while Chancellor Friedrich Merz faced an internal leadership crisis. The EU is discussing granting Canada "associated member" status, which triggered threats of tariffs from the U.S. Poland is investigating the arson of a Starlink ground station, suspecting Russian intelligence services. Denmark warned of a growing risk of a limited military attack by Russia on NATO countries.

What this means

If you have exposure to energy markets or supply chains dependent on diesel fuel and gas, risks of disruptions and price volatility remain high. It is necessary to consider that the closure of the Strait of Hormuz and sanctions against Russia and Iran may lead to further cost increases and a need to review logistics routes.

If your activities are related to crypto assets or tokenized instruments, the regulatory environment in the U.S. and the EU is changing rapidly. In the U.S., rules are now established by agencies (SEC, CFTC, Federal Reserve) rather than legislation, creating uncertainty regarding long-term compliance. In the EU, an extension of the ban on stablecoin yields is under discussion. It is recommended to monitor publications in registers and updates to guidelines.

If you invest in AI infrastructure or data centers, it is necessary to consider growing political and regulatory risks. The suspension of permits in Texas and environmental labeling in the EU may slow down construction and increase costs. Risks related to data security and cyber threats should also be considered, given incidents involving arson of infrastructure and attacks on supply chains.

What remained out of scope

Despite attention to major geopolitical and financial events, several threads that may have long-term consequences remained less prominent. First, in Russia, the Bank of Russia reported an increase in problematic corporate loans and planned easing of norms for loans for infrastructure protection, indicating growing credit risks amid attacks on infrastructure. Second, in India, the Election Commission of India found itself at the center of a scandal due to internal disagreements over the revision of voter lists, which may affect political stability in the country. Third, research showed that a classical computing method can forge RSA signatures, calling into question the security of cryptography used in financial systems and requiring a review of plans for migration to post-quantum algorithms.

Our read

The period is characterized by intensifying escalation in the energy and geopolitical segments, which directly affects financial conditions. The closure of the Strait of Hormuz and the war with Iran led to record diesel and gas prices, fueling inflation and forcing central banks to tighten monetary policy. Bond yields in the U.S., Japan, and the UK reached multi-year highs, while expectations of a Federal Reserve rate hike in October exceeded 70%. This creates pressure on the cost of capital and asset valuations, especially in sectors sensitive to interest rates.

At the same time, a shift in regulatory paradigms is observed. In the U.S., cryptocurrency regulation has shifted from legislative to agency-based, creating new rules of the game for tokenized assets and stablecoins. Regulation of data centers is tightening in the EU and the U.S., which may slow down the development of AI infrastructure. These changes require market participants to review compliance strategies and risk assessments.

Systemic stress is growing but has not yet reached critical levels. Markets are adapting to new realities, although volatility remains high. Monitoring Federal Reserve decisions in October, the development of the conflict in the Middle East, and regulatory publications in the U.S. and the EU will be key to assessing the further trajectory. The signal is mixed: inflationary pressure and geopolitical risks are intensifying, but the adaptive mechanisms of markets and regulators are currently working.

This analysis was produced automatically by a large-language-model system from the public sources listed below. It is AI-generated content: it reflects the sources and the model's processing, not an editorial opinion, and may contain inaccuracies. It is not investment, financial or legal advice and contains no call to action; base decisions on the original sources and on advice from qualified professionals.

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