Insights

On Tuesday, October headline CPI rose 0.4% month over month, while core CPI increased 0.3%. Treasury yields surged as markets repriced Fed policy, briefly pushing the 10-year back above 5%.

However, renewed enthusiasm across the AI ecosystem challenged the durability and severity of the current risk-off INFLATION Market Regime. Strong demand for Anthropic’s prospective IPO and CoreWeave’s beat-and-raise helped AI-related stocks rebound following last week’s selloff.

From our Tuesday Leadoff Morning Note: “The fact that AI stocks are not following through on last week’s carnage amid this [NVIDIA scandal] signals growing investor fatigue in the bear case. Amid relatively light positioning, the upside risk is that the Anthropic $ANT IPO is oversubscribed and gaps higher in the…

On October 1st hosted by Sean Hagan and Grace Remington on Bitcoin Magazine, Darius explained why the pace of upcoming interest-rate hikes could reveal whether the Fed is deliberately allowing pressure to build in the Treasury market.

In our opinion, market-implied pricing suggests monetary policy remains deeply accommodative, with another two to four rate hikes required to return policy to neutral

However, New York Fed President and FOMC Vice Chair John Williams recently signaled that policymakers may be considering a slower pace of tightening. If the Fed throttles back while policy remains accommodative, it could indicate a willingness to tolerate additional Treasury-market pressure.

That pressure could ultimately provide the political cover needed for…