Only indirectly, and that is the whole argument. A rate rise works by making credit dearer, so it reduces demand for borrowing. It does not produce oil and it does not reopen a shipping lane. When prices are being pushed up by supply, the standard central-bank position is to wait: you do not raise into a supply shock until the second and third round effects show up, because until then the rise reaches everything except the cause.
The counter-case is breadth and duration, and it is a serious one. If enough of the basket has been rising for long enough, the shock has already spread into ordinary price setting and is no longer confined to supply. US Fed chair Kevin Warsh made exactly that case in his Jackson Hole keynote of 28 August 2026: over twelve months 54 per cent of the goods and services in the PCE basket rose by more than 3 per cent, against 32 per cent in the two decades before the pandemic, and he counts 65 months of sustained, elevated inflation.
Two things in that same speech cut the other way. He says inflation expectations are well anchored right now, and he gave no guidance at all about the next decision. He also adds that anchored expectations tend to look strong and durable until they do not, which is a caveat worth carrying rather than a reassurance.
The bond market agrees on the expectations half. Over the past year the US ten-year Treasury rose 91 basis points and the inflation-protected version of the same bond rose 86. The gap between the two is the inflation rate the market expects, and it moved 5 basis points. So almost the whole rise in the ten-year is the real cost of money, and the market has barely changed its view on inflation.
And the cost is already being paid, whoever is right. That higher real cost of money reaches consumers on mortgages and car loans, companies when they refinance, and governments on every bond they roll over, whether or not the policy rate moves. Meanwhile, in the year to mid-September 2026, diesel was up roughly 58 per cent and petrol roughly 30 per cent - the part a rate decision does not reach.
Figures as of mid-September 2026. Related: why long-term rates move independently of the policy rate, is US inflation re-accelerating. Full write-up: https://www.tigzig.com/post/fed-caught-rate-decision-sep2026.
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