$6 Diesel, Red Sea Seizure, and ICE at the Polls

Good morning, it's Saturday, Sept. 12. Inflation came in hot — and the fuel that powers your grocery supply chain just hit an all-time record.

Also in today's issue: Houthis seize Red Sea chokepoint, Lawsuit over armed agents at polls, "Grand conspiracy" probe stalls, Asylum seeker held at Guantanamo.

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Here's what $6 diesel looks like on a farm: a combine running at harvest burns 24 to 40 gallons per hour. At yesterday's record price, that's $55 to $92 more per hour just to pull food out of the ground than it cost a year ago. That math is heading straight for your grocery bill.

The Bureau of Labor Statistics reported yesterday that consumer prices rose 0.4% in August, with the yearly rate at 3.4%. Gasoline climbed 3.9% in the month alone and is now 27.4% higher than last September — you're paying about $4.29 a gallon for regular, up from $3.19 a year ago. Diesel, the fuel that moves food and freight across the country, hit an all-time record of $6.05 per gallon. That's up 63% in twelve months. Fuel oil — the broader category that includes diesel and heating oil — surged 52% year over year.

Here's where it hits your kitchen table. Trucks haul more than 80% of U.S. farm products. When diesel costs this much, those costs ride along with every shipment of grain, meat, and produce. Economists say the pass-through to grocery prices has already begun. The question isn't whether food gets more expensive. It's how fast.

And this is where things get complicated. The core number — consumer prices minus food and energy, which shows underlying trends — came in at 0.3% for the month, a tenth of a point above what forecasters expected. That small miss matters because the Federal Reserve meets Monday. Trader bets on a quarter-point rate hike jumped to roughly 85%, up from under 50% two weeks ago. If the Fed raises rates, the benchmark moves to 3.75%–4%. That means higher costs on credit cards, car loans, and any mortgage or loan tied to a variable rate. For a household carrying a few thousand in credit card debt, even a quarter-point hike adds real dollars over a year.

The Fed has held rates steady all of 2026, hoping inflation would cool on its own. August says it hasn't. And here's the part that should concern everyone, regardless of party: the biggest driver right now is energy, and energy prices are being shaped by a military conflict, not by normal market forces. Iran-aligned forces yesterday seized a critical island controlling Red Sea shipping — we'll get to that in a moment — and they've been disrupting the Strait of Hormuz since February. Oil is up roughly 60% year over year. The Fed can raise rates, but rate hikes can't fix a supply shortage caused by a war zone. The tools that could actually help — releasing oil reserves, striking new production deals — are limited and politically difficult.

Fourth-generation Iowa farmer Mark Mueller told NBC News that the mix of $6 diesel and high fertilizer costs is "endangering one of the strongest economic pillars that we have in this country." He's not overstating it. The cost of growing food is rising faster than what farmers can charge for it. That squeeze doesn't stay on the farm. It moves through the supply chain — and it arrives in your cart.

Watch Monday's Fed meeting closely. Not just the rate decision, but the language about energy. If policymakers signal that fuel-driven inflation is beyond the reach of interest rates, that's a quiet admission that the biggest price pressure facing American families right now doesn't have a Washington-sized fix. If they hike and stay silent on energy, watch how fast that gap between what Washington can control and what it can't becomes the central question of the midterm campaign.

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Houthis seized Perim Island in the Bab el-Mandeb Strait yesterday, giving them control of Yemen's entire Red Sea coastline after government forces pulled back. The island sits at the strait's narrowest point — roughly 12% of global goods pass through this corridor — and has its own airstrip. With Iran also disrupting the Strait of Hormuz since February, Iran-aligned forces now straddle both of the world's major oil chokepoints. Brent crude briefly neared $110 a barrel before settling around $104. Saudi Arabia shut a key oil pipeline as a precaution. At least 46,000 people have been displaced since fighting in Yemen escalated sharply last week. This is the supply-side pressure behind the prices in today's lead story — and it's getting worse, not better.

Joe diGenova resigned on September 10 as lead prosecutor of the Justice Department's "grand conspiracy" investigation — a probe launched in April to target Obama- and Biden-era officials. After five months, the investigation has produced zero criminal charges. Sources across four major outlets confirmed that diGenova, 81, had lost the confidence of both the White House and DOJ leadership over the probe's pace; he had suggested indictments could come within 30 days of his appointment. No successor has been named. The investigation continues under existing prosecutors in South Florida. Whatever one thinks of the probe's premise, the outcome so far is clear: the highest-profile political prosecution effort of Trump's second term has lost its leader with nothing to show for it.

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Denver and three civil rights groups filed a federal lawsuit September 10 to block the Trump administration from sending armed ICE agents to polling sites ahead of November's midterms. The suit cites two incidents: in May, armed federal agents swarmed an active polling site parking lot in San Antonio to detain someone in full view of voters; in June, ICE agents entered a Syracuse polling site to question a volunteer. The lawsuit invokes a Civil War-era federal law barring armed federal officers from stationing themselves at election sites. DHS Secretary Markwayne Mullin has said agents could go to polls "if there is a threat" or to serve a warrant — but the department has also said it is "not planning operations targeting polling locations." The court will now have to decide which of those positions holds.

Adam Abdullah, a 31-year-old Somali asylum seeker with a valid work permit, a Social Security number, and no criminal record beyond two paid parking tickets, has been held at Guantanamo Bay's Camp Six for roughly two weeks. Federal agents arrested him during an immigration sweep in St. Paul, Minnesota, last December — without a warrant, according to his account to Minnesota Public Radio. He was told he'd be deported to Somalia. Instead he was flown to Guantanamo and shackled. DHS would not explain why he was arrested; a spokesperson called recent detainees "some of the worst of the worst." His attorney said the detention is political, not security-based. The ACLU has sued to stop the practice, with a hearing set for October 14. (Reason)

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National average price of a gallon of diesel on September 11 — a new all-time record, up 63% from $3.71 a year ago. Diesel powers the trucks that ship more than 80% of U.S. farm products. What it costs to move food now shows up in what it costs to buy it.

P.S. Should the Fed raise rates Monday? Hit Reply — one word is enough.