Credit & Fed Desk: October 15, 2026
Good morning. It's Thursday, October 15th, and you are listening to the Credit and Fed Desk.
Producer prices just posted their biggest jump since 2022. Final demand prices rose 1.3 percent in September, the largest monthly advance since March 2022. From a year ago, they're up 6.3 percent, the most since December 2022.
And the bond market rallied anyway.
The ten-year Treasury yield is around 5.07 percent this morning, in press quotes. Per CNBC, that's down almost 13 basis points. Yesterday, on the hot CPI, the ten-year spiked above 5.3 percent. By the close, it was back at 5.19. In between, money ran out of an AI and tech selloff and into the safety of Treasuries. CoreWeave's bonds fell to levels that typically signal distress. And the odds of an October rate hike went to about a coin flip, then faded.
Tonight at 10:30 Central, after this episode, Fed Chairman Kevin Warsh speaks in Bangkok.
Show notes
- Fed: September producer prices up 1.3% m/m and 6.3% y/y, the biggest since 2022; excluding food, energy and trade, 0.5% and 5.0%; retail sales up 0.8% (0.2% ex-gas) and jobless claims at 199,000; the Beige Book says "Higher oil prices permeated all District reports"; Daly and Goolsbee, and Authers on why the market reduces the urgency to hike.
- Treasuries: a correction on Hartnett's cash trigger (4%, not 5%); Wednesday's closes with the ten-year at 5.19 after spiking above 5.3% on CPI, then about 5.07% after PPI as the haven bid returned; Apollo's Torsten Slok on why AI capex isn't rate-sensitive.
- Credit: CoreWeave shares fall about 15.5% and its 2032 bonds trade below 80 cents, "the subprime tranche" of AI per D.A. Davidson's Gil Luria; Oracle's 2032 bond at 7.24%; no public word yet on Volta; HY 316, IG 83, CCC 12.67% as of Tuesday; Fitch on nontraded BDC redemption requests.
- Banks and AI finance: Bank of America loses $22B of market value on its $1.21B money-laundering and sanctions fine; PNC's AOCI deepens to negative $6.5B and U.S. Bancorp posts record revenue; the S&P 500 falls 1.11% in its worst day since late July; Anthropic's reported $16.8B third-quarter revenue.
- Arthur Hayes (labeled, speculative, talking his book) on trading the "multi-trillion dollar bail out"; quick hits on China's trade surplus, Italy borrowing below France, Brent 104.27 and gold; the scoreboard and Warsh in Bangkok at 10:30 tonight.