A bounce on Friday; a hike by Wednesday.

Two things eased on Friday and one of them mattered less than it looked. Crude fell 2.8% after Iran said it would meet Gulf states in Oman on Monday to discuss the Strait of Hormuz — a genuine development, but a scheduled meeting is not a settlement, and the blockade remains in place. The second easing was inflation, and here we owe readers a correction of emphasis. Yesterday we argued that August CPI could not see the oil spike and therefore could not change much. The first half was right: the data predates the move. The second half was wrong. Core ran a tenth hotter than forecast, and it was the inflation print, not the oil price, that carried implied hike odds from 70% to roughly 86%. The market spent the week arguing about energy and was ultimately moved by the part of the basket that has nothing to do with it.

• Fourth consecutive weekly loss for both the S&P and the Nasdaq, despite Friday’s bounce.
• Crude finished above $100 on both benchmarks, having moved roughly ten times as far as equities did.
• Hike odds ran from 62% to about 86% across three sessions, on producer prices and then consumer prices.

Figures are Friday 11 Sep’s US close and changes over the week; commodity and rate levels are the latest available and approximate. US markets are closed Saturday. Hike odds per CME FedWatch. Single names appear as news, not recommendations. Times GST.

Iran’s foreign ministry said on Friday that it will meet Gulf states in Salalah, Oman on Monday to discuss the Strait of Hormuz, describing the purpose as promoting understanding among countries of the region and strengthening shared regional security. Bloomberg reported that Oman is seeking to bring GCC foreign ministers and Iran to the same table, and that the discussions concern safe routes for commercial shipping. That is a meaningful development in a week that otherwise ran the other way, and crude responded immediately, with Brent settling 2.8% lower. It deserves to be read carefully rather than eagerly. The blockade of the strait remains in place; transit has not resumed; and a meeting to discuss a mechanism is several steps removed from a mechanism that operates. We have twice this year seen reporting that a deal was close, in June and again in August, and on both occasions the arrangements did not hold. For the Gulf, the meeting is worth watching on its own terms — regional dialogue about the waterway is better than its absence — but the price of oil will follow tankers moving, not ministers meeting.

Vault Wealth’s house view: we hold the energy and gold hedge and last week’s protection unchanged into the Fed. Friday’s pullback is not a reason to reduce: our stated trigger for taking the hedge down has always been verified normalisation of transit, not a scheduled round of talks, and that test has not been met. Nor are we adding — the position is already sized for this environment and chasing it after the move would be poor execution. On the Fed, we assume a rise on Wednesday and position for the guidance rather than the decision; a central bank tightening into a supply shock has limited room to sound confident, and the tone of that communication is the more tradeable event. We also want to be straightforward about yesterday: we told readers the inflation print could not matter much because it predated the oil spike. The timing logic held, the conclusion did not, and the core figure moved the market more than the oil price did. Balanced, liquid, hedged, and honest about what we get wrong.