Americans should expect to pay more to stay warm this winter. The National Energy Assistance Directors Association (NEADA) projects that home heating costs will rise 8.7% across all fuel types, to an average of about $1,030 per household, according to its September 14 forecast. NEADA notes that is more than 2.5 times the rate of inflation.

Families who heat with oil will be hit much harder. NEADA projects they will pay 31.3% more, with average seasonal bills of about $2,300, Quartz reported.

Why: two wars and one oil market

• The Iran war is the main driver. Fighting around the Strait of Hormuz, a U.S. oil blockade of Iran and attacks on Gulf energy sites have kept crude near $100 a barrel. Heating oil is refined from crude, so it moves first and furthest.
• Russia’s war in Ukraine, now in its fifth year, keeps pressure on global energy. Europe’s turn away from Russian gas since 2022 has tightened world natural-gas markets and pulled more U.S. gas overseas as LNG.
• Everything else costs more too. With electricity, food and rent already up, higher heating bills land on budgets that are already stretched.

Average heating bill: about $1,030, up 8.7%. Heating-oil homes: about $2,300, up 31%. (NEADA)

Who gets hit hardest

New England and the rest of the Northeast rely on heating oil far more than the rest of the country, so Boston-area households, landlords and small businesses will feel this first. Older homes, renters in oil-heated buildings, seniors on fixed incomes and restaurants and shops with high heating loads are most exposed.

What to do now, before the cold

1. Lock in or pre-buy heating oil or propane if your dealer offers a fixed-price or budget plan. Compare at least two dealers.
2. Get a tune-up. A clean, serviced furnace or boiler burns less fuel.
3. Seal the leaks: weatherstrip doors and windows, and insulate the attic if you can. Ask your utility about free or discounted energy audits.
4. Apply for help early. LIHEAP, the federal home-energy assistance program, and state fuel-assistance programs open in the fall and funds can run out. In Massachusetts, apply through your local community action agency.
5. Call your utility before you fall behind. Payment plans and winter shutoff protections are easier to set up early.

For business owners

Budget for higher heating and energy costs in Q4 and Q1, check whether your leases pass heating costs through, and watch oil: our markets briefing tracks what the Iran talks could do to prices.

Background

Home heating costs depend on two things: the price of the fuel and how much of it a home uses. Prices are set largely by energy markets, while usage depends on the weather, the size and age of the building, its insulation and the efficiency of its heating system. A colder-than-normal winter can raise bills even if prices hold steady, and a mild winter can soften the impact of higher prices.

Heating oil belongs to a family of fuels called distillates, which also includes diesel. Because these fuels are refined from crude oil and compete for the same refinery output, their prices tend to follow crude oil and diesel markets. Retail prices also include the costs of transportation, storage and local delivery, which is why prices can vary from one dealer to the next.

The Northeast has long been the part of the country most reliant on heating oil, a legacy of older housing and the region’s historical access to oil delivered by sea. Many homes and small commercial buildings in New England still use oil-fired boilers or furnaces, alongside natural gas, propane, electricity and wood.

What it means for Boston-area readers

For Greater Boston households and businesses, the steps in the article are the main levers available. A few additional general points help:

• Read dealer plans carefully. Fixed-price, capped-price and budget plans work differently. Ask about any enrollment fees, minimum purchase requirements and what happens if market prices fall.
• Track your usage. Keeping records of deliveries or monthly bills helps you compare winters and see whether efficiency steps are working.
• Avoid running out. Automatic delivery or regular tank checks help prevent emergency deliveries, which can carry extra charges, and protect equipment.
• Use thermostats wisely. Programmable or smart thermostats can lower temperatures when buildings are empty or overnight.
• For landlords and tenants: Review who pays for heat under the lease, and talk early about any concerns.

Key terms

• Distillate fuel: A category of refined petroleum products that includes heating oil and diesel.
• Fixed-price plan: An agreement to buy fuel at a set price per gallon for a season.
• Budget plan: An arrangement that spreads expected annual heating costs into equal monthly payments.
• LIHEAP: The Low Income Home Energy Assistance Program, a federal program that helps eligible households with heating and cooling costs.
• Heating degree days: A measure of how cold a period was, used to estimate heating demand.

What to watch

• Weekly heating oil and propane price updates published by the U.S. Energy Information Administration during the heating season.
• Crude oil and diesel prices, which tend to influence heating oil costs.
• Weather forecasts and heating degree day data for the region.
• Application dates and eligibility guidelines for fuel assistance programs.
• Your own monthly usage compared with past winters.

Federal Reserve Bank of Boston President Susan Collins has continued to shape the national conversation on interest-rate policy throughout 2026, with a series of public remarks tying the path of rates directly to incoming inflation data. In comments reported in late August, Collins said that whether the Federal Reserve holds rates steady continues to depend on further progress on inflation, underscoring a data-dependent posture that has characterized much of her public commentary this year.

Earlier in the year, in February remarks covered by Bloomberg, Collins indicated that interest rates were likely to remain on hold “for some time,” a view she reiterated in various forms across the following months even as inflation and labor-market data fluctuated. In May, according to reporting in the Boston Globe, Collins discussed her position within the Federal Open Market Committee, including how she has approached dissent within the committee’s deliberations, as well as changes among her fellow policymakers.

As the president of one of the twelve regional Federal Reserve Banks, Collins holds a rotating vote on the FOMC and is a closely watched voice on how the Fed weighs incoming economic data — including employment reports, inflation readings, and financial conditions — against the risk of moving too quickly or too slowly on rates. Her remarks throughout 2026 have generally emphasized patience, while leaving open the possibility that further rate moves, in either direction, would depend on how inflation data evolves in the months ahead.

For Boston-area banks, lenders, and businesses that depend on the cost of credit, the Boston Fed president’s public commentary is one of the more direct local windows into the Federal Reserve’s thinking. Collins, based in Boston, is one of the few Fed officials whose remarks carry a distinctly regional lens, often referencing conditions in New England alongside the national picture.

Massachusetts financial institutions and businesses will continue to watch Collins’ public appearances and the broader FOMC’s decisions in the coming months, as the Fed continues to weigh inflation trends against labor-market conditions in setting the path for interest rates through the remainder of 2026.

Sources:

• https://www.bloomberg.com/news/articles/2026-08-25/fed-s-collins-says-holding-rates-hangs-on-inflation-progress
• https://www.bloomberg.com/news/articles/2026-02-24/fed-s-collins-says-interest-rates-likely-on-hold-for-some-time
• https://www.bostonglobe.com/2026/05/13/business/federal-reserve-bank-boston-collins-rates/
• https://www.bostonglobe.com/2026/05/07/business/fed-collins-fomc-dissenters-statement/

Background

The Federal Reserve System has two main parts that shape monetary policy. The Board of Governors in Washington includes members appointed by the President and confirmed by the Senate. The twelve regional Federal Reserve Banks, including the Federal Reserve Bank of Boston, each have a president who participates in policy discussions. The Federal Open Market Committee, which sets the target range for the federal funds rate, brings these groups together.

All regional bank presidents attend FOMC meetings and take part in deliberations, but only some vote in a given year. The president of the New York Fed holds a permanent vote, and the other presidents rotate through the remaining voting seats. A president who is not voting in a particular year still shares views in the meeting and in public remarks.

A “data-dependent” approach means policymakers say they will base decisions on incoming economic information rather than commit to a fixed path in advance. In practice, that places attention on regular releases such as inflation measures, employment reports and indicators of financial conditions.

Several times a year, FOMC participants also submit economic projections, published as the Summary of Economic Projections. These include each participant’s anonymous view of the appropriate path for rates, often displayed in a chart known as the dot plot. The projections are not commitments and can shift as conditions change.

What it means for Boston-area readers

For households and businesses in Greater Boston, Fed policy reaches daily life through the cost of borrowing and the return on savings. Short-term rates, such as those on credit cards and many lines of credit, tend to respond quickly to changes in the federal funds rate. Longer-term rates, such as those on fixed-rate mortgages, are influenced by broader market expectations about inflation and policy.

A few general habits help readers interpret Fed commentary:

• Read the full remarks. Headlines summarize, but speeches and interviews often include important qualifications.
• Distinguish individual views from committee decisions. One official’s comments reflect that person’s thinking; policy is decided by the committee.
• Watch the trend, not one data point. Policymakers typically look at patterns across several months.
• Know your own exposure. Understanding which of your loans carry variable rates helps you see how changes could affect you.

Key terms

• FOMC: The Federal Open Market Committee, the Fed body that sets monetary policy.
• Federal funds rate: The interest rate banks charge each other for overnight loans; the FOMC sets a target range for it.
• Rotating vote: The system by which regional bank presidents, other than New York’s, take turns holding voting seats on the FOMC.
• Dissent: A vote against the committee’s decision by a voting member, recorded in the official statement.
• Data-dependent: An approach in which policy decisions follow incoming economic information.
• Beige Book: A Fed report summarizing anecdotal information on economic conditions in each of the twelve districts, published several times a year.

What to watch

• Official FOMC statements released after each meeting.
• Meeting minutes, which are released a few weeks after each meeting and describe the discussion in more detail.
• Major inflation measures, including the Consumer Price Index and the Personal Consumption Expenditures price index.
• Monthly employment reports and other labor-market data.
• Public speeches by Fed officials, including the Boston Fed president, and the First District section of the Beige Book.

Massachusetts’ surtax on high earners — commonly known as the “millionaires tax” — has once again exceeded expectations, generating $3.1 billion in fiscal year 2026 with two months of collections still to be counted.

How the numbers stack up

The state originally budgeted for $2.4 billion in surtax revenue this fiscal year. Instead, collections have already topped $3.1 billion, building on the $3.0 billion collected in fiscal 2025. That’s a substantial jump from the roughly $2 billion a year that outside analysts initially projected when voters approved the measure back in 2022.

The surtax applies a 4% additional tax on household income above $1 million, with that threshold adjusted upward each year for inflation.

Where the money is going

State lawmakers have directed the revenue toward child-care grants, increased funding for the MBTA, and general budget operations. With collections running well ahead of plan, the Legislature is now budgeting to commit $2.7 billion in surtax revenue next fiscal year — nearly three times the $1 billion originally budgeted when the tax took effect.

The migration question

Critics of the surtax have pointed to high-income residents leaving the state as evidence the policy is backfiring, and some research has tied billions in departed income to the tax’s introduction. But the continued growth in collections complicates that narrative: as one campaign spokesperson put it, the trend suggests “the ultra-rich are clearly staying in Massachusetts” in large enough numbers, and earning enough, to keep pushing revenue higher year after year.

Why it matters

Surtax revenue has become a load-bearing piece of the state budget, particularly for transit and child care. Whether that revenue keeps outperforming will shape how much fiscal room Beacon Hill has in future budget cycles — and how much scrutiny the tax continues to draw from both sides of the debate.

Background

The Massachusetts surtax was created through a constitutional amendment approved by voters at the ballot in 2022. Supporters often called it the Fair Share Amendment, while it is also widely known as the millionaires tax. Because it is part of the state constitution, changing or repealing it would require another constitutional amendment rather than an ordinary act of the Legislature.

Massachusetts generally taxes most income at a single flat rate. The surtax adds an additional 4 percent on the portion of annual taxable income above the threshold, not on all income. A household with income just above the threshold pays the extra tax only on the amount over it. The threshold is adjusted each year for inflation, as the article notes.

The amendment directs that the revenue be spent, subject to appropriation by the Legislature, on public education and transportation. The Legislature decides the specific uses each year through the budget process, which is how revenue has been allocated to programs such as child care and the MBTA.

The state’s fiscal year runs from July 1 through June 30, which is why fiscal 2026 collections can still be coming in after the end of June. Final figures can take additional time to tally.

What it means for Boston-area readers

For most residents, the surtax does not apply directly, since it affects only income above a high threshold. Its effects show up indirectly through the state budget. Because the revenue is directed to education and transportation, it can influence funding for schools, public colleges, transit and roads.

The debate over the surtax touches on questions economists and policymakers continue to study. Supporters generally argue that it raises revenue for public investments from those most able to pay. Critics generally argue that it may encourage some high earners or businesses to relocate, affecting the state’s long-term tax base. Researchers use tax records, migration data and other sources to examine these questions, and findings can differ depending on methods and time periods. Readers can follow both perspectives through nonpartisan research organizations, state revenue reports and established news coverage.

One-time events can also affect collections. Large capital gains from selling a business or other assets, for example, can produce unusually high income in a single year, which is one reason revenue from high earners can vary from year to year. Financial market conditions, business sales and the timing of large transactions can all influence how much surtax revenue arrives in a given year, which makes it difficult to treat any single year’s collections as a reliable baseline.

Key terms

• Surtax: An additional tax applied on top of an existing tax, often above a certain income level.
• Constitutional amendment: A change to the state constitution, which in Massachusetts can reach the ballot through legislative or citizen-initiated processes.
• Threshold: The income level above which the surtax applies.
• Inflation indexing: Adjusting a dollar amount each year to reflect changes in prices.
• Subject to appropriation: Money directed to a purpose but still requiring the Legislature to approve specific spending.
• Fiscal year: The state’s budget year, running from July 1 to June 30 in Massachusetts.

What to watch

• Final fiscal 2026 surtax collection figures once the full year is tallied.
• Monthly revenue reports from the state Department of Revenue.
• Budget debates over how surtax revenue is allocated in future years.
• Research on income migration and its relationship to state tax policy.
• Reports from nonpartisan budget and tax research organizations.