The Bond Market Is Pricing In Something Worse Than Inflation | Weekly Roundup

Bond rallies through hot inflation data signal markets are pricing an AI-financing-driven growth slowdown, not disinflation, and any bailout would favor debt over equity.

• Bonds rally despite hot inflation: CPI and PPI both beat expectations this week, yet the 10-year yield fell sharply as traders reread the data as a growth-slowdown signal tied to AI, not a hawkish Fed signal.
• October hike odds collapsed: Despite two scalding inflation prints, odds of an October FOMC hike fell from roughly 70% three weeks ago to about 30% after Fed officials (Williams, Waller, Bowman, Jefferson) talked markets off a hike.

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