“Picture to yourself the things which usually happen in the bath: some people splash the water, some push, some use abusive language, and others steal. Thus you will more safely go about this action if you say to yourself, ‘I will now go bathe, and keep my own mind in a state conformable to nature.’” — Epictetus, Enchiridion, 4

The Federal Reserve. The consumer price index printed 3.4 percent annual inflation for August, hotter than the 3.3 percent forecast, with core prices up 0.3 percent on the month against an expected 0.2 percent. Gasoline, up 27.4 percent from a year ago, drove a third of the monthly increase. By Friday afternoon the futures market put the odds of a quarter-point rate hike at Wednesday’s decision near nine in ten, up from 70 percent on Thursday (Reuters, 2026; CBS News, 2026). It would be the Fed’s first hike in more than three years, and the market has been anticipating it for weeks: the 10-year Treasury touched 4.95 percent Thursday, its highest since October 2023, while crude oil crossed $100 a barrel and the national average for diesel climbed above $6 a gallon (CNBC, 2026; CBS News, 2026). None of this was a secret. In July the vote to hold was 9-3, with three regional presidents dissenting in favor of an immediate hike, and the minutes recorded that “many participants assessed that policy tightening would likely be necessary if inflation did not decline” (CNBC, 2026).

Iran, oil, and the price of denial. The war entered its seventh month. On Saturday the United States and Iran exchanged missile fire in the waters around Iran, with the Islamic Revolutionary Guard Corps firing ballistic missiles at two U.S. Navy ships and U.S. Central Command striking three Iranian vessels in response (Reuters, 2026). Iran’s parliament speaker has threatened retaliation against U.S. oil and gas interests across the Gulf, and Tehran says it will announce a restricted zone outside the Strait of Hormuz in the coming days (Reuters, 2026). Consumer inflation is now a full percentage point higher than it was when the war began (CBS News, 2026). Last week’s digest noted that the vice president was asked whether the war would be over by the midterms and answered, “I wouldn’t call it a war.” The gas pump, the diesel pump, and the bond market have rendered their own verdicts, and none of them needs a press conference.

9/11, twenty-five years. The 9/11 Commission’s verdict remains the most honest sentence in American government writing: the attacks “were a shock, but they should not have come as a surprise.” Its findings were specific, documented, and human, a failure of imagination across agencies that had been “blinking red” all summer and still could not picture aircraft striking towers. This week the New York Times reported on documents, shielded from public view for more than two decades, showing that New Yorkers were misled about air quality in the months after the attacks, with investigators still finding asbestos half a mile from ground zero (Just Security, 2026). The anniversary now belongs to a generation with no living memory of the day, which makes the lesson harder to transmit and more necessary: the cost of refusing to picture trouble in advance is not abstract, and it is paid in lives. I published A Shock, Not a Surprise on the site this week, walking the road to the day and the failures that let the plot through. It is the most important thing I have written this year.

Germany. The far-right AfD won 44 percent in Sunday’s Saxony-Anhalt state election, and its deputy parliamentary leader says the party is “very, very close” to taking power. In the same week, prosecutors in Saxony said investigators had found twenty-one explosive devices connected to attacks on the electricity grid, and Berlin police opened a probe into a fire at a transformer substation (Reuters, 2026). Germany has been warned about both trajectories for a decade. The warnings were the splash.

The one hopeful bulletin. White House envoys Steve Witkoff and Jared Kushner visited Moscow and Kyiv over the weekend and touted “substantive progress” toward a settlement in Ukraine, with the Kremlin saying it does not rule out resuming talks (The Hill, 2026). It is early, and this war has broken hearts before. But this newsletter reports the light as honestly as the dark.

Here is the honest reading of the week: a central bank that was warned, a war that was denied, an anniversary of a failure of imagination, a democracy that was warned, and a peace process that may or may not be real. The thread through all of it is Epictetus’s bath. The Stoic discipline was never optimism and never pessimism. It was rehearsal. You picture what the action contains before you enter it, the splash, the push, the abuse, the theft, so that when the water hits, your mind is already where it needs to be: conformable to nature, unshaken by the thing you chose to see coming.

The three Fed dissenters rehearsed. The bond market rehearses every trading day, because it cannot be lied to; it is a price, not a promise. The 9/11 Commission’s whole indictment is that the people paid to rehearse did not, and the dead paid for it. The difference between a shock and a surprise is not the event. It is whether you permitted yourself to see it coming. The event is never optional. The surprise always is.

The Practice

This week, pick one hard thing you have been refusing to picture: the bill you know is coming, the conversation you know you must have, the test you have been meaning to schedule, the outcome you have been calling unthinkable. Picture the bath. Name the splash, the push, the abuse, the theft, whatever this particular bath contains, and then enter it anyway, with your mind already conformable to what you will find. The event may still hurt. It will not be allowed to surprise you.

See you next Saturday. — Phil

Sourced from Reuters’ and CBS News’ coverage of the August CPI and Friday’s Fed hike pricing; CNBC’s coverage of the July minutes and the Treasury selloff; Reuters reporting on the September 5 U.S.-Iran naval exchange and Iran’s Hormuz restricted-zone announcement; the New York Times’ investigation of 9/11 air quality disclosures, as carried by Just Security; Reuters reporting on the Saxony-Anhalt election and the German grid attacks; and The Hill’s reporting on the Witkoff and Kushner visits.

Sources

PRH | huffmanwrites.org | © Philip Huffman