Credit & Fed Desk: October 14, 2026
Good morning. It's Wednesday, October 14th, and you are listening to the Credit and Fed Desk.
September CPI is out, and the story is the core. Headline inflation rose 0.6 percent in the month and 3.7 percent from a year ago. That's roughly in line. Core inflation, which strips out food and energy, rose 0.3 percent in the month and 2.6 percent from a year ago. That's about a tenth of a point hotter than forecasters expected.
Yesterday, futures gave an October rate hike roughly a one-in-five to one-in-four chance. This morning, press relays put it in the mid-40s to about half. Nick Timiraos of the Wall Street Journal says the odds "moved up to 50 percent." Call it a coin flip.
The two-year Treasury yield jumped about 13 basis points in early trading, and the ten-year is near 5.30 percent.
Show notes
- Fed: September core CPI +0.3% m/m and 2.6% y/y, about a tenth hot and broad-based per Timiraos (three-month core services ex-housing from 1% in July to 4.6%); October hike odds from one in five to one in four to the mid-40s to about half, a day after Williams said maybe one more; Collins leans harder, Bowman feels no urgency.
- Treasuries: Tuesday's official closes rallied (2-year 4.79%, 10-year 5.21%), then the front end reversed after CPI with the 2-year up about 13 bp; Authers says 5% is "been and gone," BofA's fund manager survey puts the new line at 6%, and Bassman calls a 20-year above 6% a "nightmare scenario."
- Credit: Volta's roughly $5B AI-infrastructure loan commitments due 4 PM CT, with lenders "feeling maxed out on data-center debt"; HY 311, IG 83, CCC 12.53% as of Friday; Matt Levine on TWG and how private credit is (partially) funded by annuities; public BDC prices flag trouble before the marks.
- Banks: JPMorgan, Citi and Wells Fargo post a fifth straight quarterly record in net interest income while bank stocks lag; Bank of America earns $6.9B including a $1.2B regulatory settlement, Morgan Stanley $4.9B with equities revenue up 41%, and BlackRock reports $205B of net inflows.
- AI finance, Europe and oil: Anthropic investor day and an IPO chill; Brent 105.40 after briefly reaching 107, WTI 95.31; the ECB's Wunsch says "we are probably going to have to hike again" as France stays stuck; gold lower; then the scoreboard.