Hot Inflation, Quiet Fed

September CPI rose to 3.7% headline and 2.6% core, both above expectations and driven largely by gasoline, and producer prices also ran hot. The 10-year Treasury yield hit about 5.33% after the CPI report, then fell to about 5.09% by Friday as concerns over AI-related debt sent investors into the safety of Treasuries. Fed Chair Warsh reaffirmed the Fed's commitment to price stability but gave no signal on its next move. The CME FedWatch Tool puts October hike odds at 16% and the odds of a hike by December at 89%, up from 81% a week ago. The Fed's next decision is October 28.