SUPPLY CHAIN

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For the first time in over three years, the Federal Reserve raised interest rates in an attempt to combat stubborn inflation.

But Zac Rogers, an associate professor of supply chain management at Colorado State University, told CFO Brew that he wasn’t sure lifting rates would help inflation right now.

“Interest rates really only impact demand. They don’t do that much to impact supply because what we’re having, our real problem, is we have an energy shortage and we also have a capacity shortage,” Rogers said. In particular, “We don’t have enough truck fleets right now.”

Skyrocketing fuel costs. But “what I’ve been paying attention to is diesel and jet fuel, because those are the two pieces that underlie everything,” Rogers said. The price of Brent crude oil broke $100 on September 9, and Rogers calculated that the price of diesel, as of September 7, was up 56% since the start of the war in Iran the week of February 23. Compared to 2025, higher diesel prices have cost the American economy over $97 billion per week this year, Rogers said.

In the air, the weekly average price of jet fuel was up 106% YoY as of the week ending September 25, according to the International Air Transport Association.

How Avoli gets a “snapshot of demand” for its athletic shoes.—DL

      

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AI ECONOMICS

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Along with uncanny valley food photos and slop videos, there’s something else we can blame AI for: inflation.

AI is among the factors contributing to inflation, Fed board member Lisa Cook said during a September 28 speech at Oakland Tech Week.

As the data center buildout intensifies, demand for energy and construction labor affects the economy broadly, Cook noted. “Prices for AI-related goods—such as chips, computers, and software—have surged,” and electricity and water prices have both risen around 5% in the past year, she said.

Outsized spending concentrated in the AI sector has also boosted inflation, Cook said: “Had that demand been spread evenly across the economy, the overall price index would not [have] climb[ed] as much,” she observed.

The personal consumption price index increased 0.31% for the month of August and was up 3.4% YoY—the sixth straight month above 3%.

Cook doesn’t think “policy intervention” to alleviate pressure from AI spending is necessary.—CV

      

COMPLIANCE

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Any regular CFO Brew reader knows that cybersecurity threats are a strategic challenge for both the finance and technology functions. And government entities like the IRS certainly aren’t immune to cyber threats.

In fact, the IRS’s cybersecurity efforts were “not effective” in key areas including identification, detection, and protection in fiscal year 2026, according to a recent report from the Treasury Inspector General for Tax Administration (TIGTA).

The stakes are high for an agency that houses a large amount of sensitive taxpayer information. (It processed 271.4 million tax returns and other forms in 2025.) Without the IRS fixing its cyber shortcomings, “taxpayer data could be vulnerable to inappropriate and undetected use, modification, or disclosure,” according to the report.

Cyber shortcomings. A 2014 law called the Federal Information Security Modernization Act (FISMA) requires federal agencies to implement and report on information-security frameworks. Inspectors use a set of 30-plus metrics across six function areas established by FISMA to evaluate these frameworks.

The IRS needs to strengthen its “identify, protect, and detect” framework.—AZ

      

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market forces

Francis Scialabba

Today’s top finance reads.

Stat. 7.28%. That was the mortgage rate for a 30-year fixed home loan last week, an increase from the previous week’s 7.03%, according to Freddie Mac data. Mortgage rates have increased for six weeks in a row. (CNN)

Quote. “A franchising contract is 20 years. The average marriage in the US is 8.2. So you got to get it right.”—Tom Curtis, Burger King’s US president, on the chain’s plan to sell roughly 200 company-operated restaurants to franchisees (CNBC)

Read. Nike’s restructuring plan includes cutting back the supply of an iconic retro product. (Bloomberg)

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