US Inflation Came In Hot and Rates Paid for It
A firmer print lifted the two-year yield 19 basis points and put a half-point December move back on the table.
US consumer prices rose 0.4% in October 2026, above the 0.3% consensus, with core inflation at 0.3%. The two-year Treasury yield jumped about 19 basis points to 4.738%. Dallas Fed president Logan said at least two more quarter-point hikes are needed, and markets priced roughly a 10% probability of a half-point increase in December. The Nasdaq fell more than 300 points intraday. High rates alongside high valuations is the least favourable combination for AI capital spending, and the first casualties are cash-consuming neoclouds whose financing costs reprice immediately.
