One River Peters wknd notes

OR Peters - wknd notes 20 Sep 2026 Eric Peters · One River Asset Management · Chief Investment Officer Sun 20 Sep 2026, 6:31am ET

Hope all goes well… “Our class of 40 were called into a room,” said Liv, from Cyber Warfare School, having just learned where she’ll be stationed for 5 years. “Flashed our names on a screen, and we’d stand up and state our first preference,” she continued. “The first of us stood up and said, ‘2nd Lieutenant so and so – first choice Colorado,’ and the Major running the session said, you’re going to Germany,’” Liv said, laughing, kind of. “The next guy, “2nd Lieutenant so and so - Hawaii,’ and the Major said, Kansas.” On it went. First choice Washington DC, you’re going to Louisiana. Washington State, South Korea. “No one got their first choice. But we’re all in this together, we’re tight. The whole thing was fun in a sick way. It’s what we signed up for.”

*Overall:* “Economic activity is expanding at a solid pace. While uncertainty remains elevated - owing, in part, to geopolitical developments - domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little,” said Kevin Warsh to the reporters, describing an economy that should be the envy of the world in any age, let alone one as tumultuous as ours. “The American economy appears to be strengthening. New hiring, private-sector earnings, business capital investment - each of these markers has improved in recent months and is pointing in a good direction. Credit flows have been robust, particularly for businesses,” continued the Fed Chairman. “And as I said at the policy symposium in Jackson Hole, I would be hard-pressed to describe broad financial conditions as restrictive. This view was widely shared by the Committee,” he said. “So, we removed a dose of accommodation.” There are 343 million people in the US. 87 million homeowner households. 3.25 million firms with 5 or more employees. 19,491 municipal governments. 20 major industry sectors. One federal government. And America’s central bank must determine a single overnight interest rate for them all. There’s obviously no way to do it without maintaining rates too low for some and too high for others. Rates are too low for hyperscalers and too high for first time homebuyers. Rates are too low for producers of strategically vital minerals and too high for private equity managers who optimized the economy and left it over-exposed to our adversaries. Rates are too low for weapons makers and too high for a military that has depleted its stockpiles. And now that America has decided to reverse decades of unchecked globalization - rebuilding its economic resiliency to restore its sovereignty - demand for capital will remain robust, no matter the rate.

*Fourth:* “Why did yields rise since the last FOMC meeting until this?” asked Chairman Warsh, rhetorically, in response to a reporter’s question. “I’ll say three things, first is economic strength. Part of the reason why we’ve seen over the course of 2026, long-term yields go up is the economy is strengthened,” he said. “Second reason, competition for capital. The surge in capital expenditures, is real, and the so-called hyperscalers are out in the market raising funding, and so the competition for capital is real and I think it partly explains the increase in yields.”

*Fourth II:* “The third, is geopolitics,” said Warsh. “The situation hot spots around the world are driving long-term yields. It’s not simply spot prices of energy, or spot process for corn or soybeans or wheat, but it’s the difference between those spot prices and so-called crack spreads.” Ukraine’s growing attack on Russian refining capacity, and congestion in the Strait continue to push up prices. “What that means for products that find their way into stores across the country. I think those are the three leading explanations, but certainly not an exclusive list.”

*Fourth III:* The Fed Chairman could have easily included the fourth reason, which is that America’s government has lost the ability to materially control its chronic deficit spending without sparking a…