Hot US Inflation, Treasury Safe Haven, CoreWeave's Credit Risk

September’s hotter-than-expected consumer and producer price indices have intensified pressure on the Federal Reserve to maintain an aggressive interest rate path. This broad-based inflation environment, driven significantly by energy costs and persistent price pressures, has triggered volatility in bond markets and forced a reassessment of rate hike probabilities. Meanwhile, Wall Street is witnessing a structural shift as equity trading revenue threatens to overtake fixed income, which remains hampered by rising rates and shifting client demand. The massive capital requirements for AI infrastructure are fueling a surge in corporate debt issuance, prompting intense scrutiny of the sustainability of these investments and the potential for future equity-based funding. Amidst these market dynamics, the housing sector continues to struggle with elevated borrowing costs, while investors await signals from Fed Chair Kevin Warsh regarding the central bank’s policy trajectory ahead of the upcoming mandatory blackout period.