Inflation, bonds and AI

Three clocks are ticking on AI and rates today: CPI, the long bond, and the Anthropic IPO.

1. CPI, later today

No year-over-year figure this month. Last year's shutdown left no October 2025 base. Consensus is headline +0.3%, core +0.2%. Waller spoke this morning: even a softer October wouldn't change his support for a December hike, and 50bp should be considered if core is around 0.3% or higher. December 25bp odds jumped to 96.3% from 76.3% after the speech.

2. The long end is where equities feel it

The 10-year sits near 4.86%, about 40bp below early October, and the 30-year near 5.26%. That's a relief, but this is a heavy supply week. The Treasury is selling $42B of 10-year notes today and $25B of 30-year bonds Thursday. If a hot core print pushes a hike-plus-2027 path into the long end, equity valuations feel it first, especially long-duration AI names whose cash flows sit far out.

3. AI is now a credit story

Goldman expects hyperscaler debt issuance of about $420B in 2027, up 60% from 2026. BofA says 10-year hyperscaler spreads have widened about 50bp this year, versus about 20bp for non-AI industrials. With rate-hike odds climbing, the cost of capital is becoming a real constraint on who wins the infrastructure race.

4. Nvidia's governance overhang

Nvidia's board launched an independent investigation after Jensen Huang confirmed a relationship with a woman accused of working for Chinese intelligence. The stock fell about 4% Monday. The issue for the sector isn't the personal story but key-person and national-security risk at the center of the AI supply chain.

5. Anthropic IPO: the price test

The latest draft prospectus shows 825M shares at $70-78, raising up to $64.4B. That follows a retracted $70-80 range that implied about $1.4T. Backers reportedly pushed for a lower valuation after last week's AI selloff. The pricing will be a read-through on whether public markets still pay up for AI at a time of higher rates, wider credit spreads and a distracted Nvidia.

The bottom line: a cool core print and a well-received 30-year auction would give AI risk some room. A hot core print would test both the 5% long end and the IPO window in the same week.

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