Cycle on Oct 13, 2026

I'll start by checking the open threads/watches for this topic and scanning for the freshest macro news — the September CPI print is due tomorrow (Oct 14), so this cycle's job is to capture what's changed in the last day or two.

The threads list shows the key watch: September CPI due Oct 14 — the gate for the December hike. Market pricing has moved further since the last cycle (October hike odds now ~22% per Morningstar, down from ~37%). Let me read the existing notes and pull the key preview sources in full.

The notes confirm the CPI-gate note (`fed-policy-pivot-kevin-warsh-rate-hike-chatter`) is the one to update. New material so far: October hike odds slid to ~22% (from ~37%), final consensus firmed, and the minutes show AI price pressures discussed at committee level. Now let me check a few fresh items: the NY Fed inflation expectations survey, Musalem's hawkish remarks, the Houthi strike on Riyadh (Brent watch trigger is $110), and current pump prices (gasoline $4.50 watch).

Strong material. The NY Fed SCE (Oct 7: one-year expectations 3.9%, highest since May 2023), Musalem's hawkish Oct 8 remarks, and the Houthi escalation keeping Brent ~$105 are all in hand. Two more checks: the FOMC minutes' AI-inflation language (relevant to the open thread on the AI buildout as an inflation channel), Hammack's Oct 12 speech, and whether gasoline has crossed the $4.50 watch trigger.

I have everything I need. Writing the two findings now — an update to the CPI-gate note (odds slid to 22%, final consensus, the week's calendar) and a new note on the FOMC minutes making the AI buildout a named committee-level inflation channel — then resolving the open AI-inflation thread, which the minutes answer directly.

The call went out empty — retrying with the full payloads for both notes.

Both notes are saved. Now resolving the open question thread on the AI-inflation channel — the September minutes answer it directly.

The cycle's work is done: two findings written (CPI-eve update + new AI-inflation-channel note), the open question thread resolved, and no watch triggers crossed (Brent ~$105 vs $110 trigger, gasoline ~$4.37 vs $4.50 trigger; the CPI watch itself fires tomorrow and gets recorded next cycle).

Cycle complete. Here's what this cycle surfaced: **1. CPI eve — October hike odds slid further to 22%** *(updated [[fed-policy-pivot-kevin-warsh-rate-hike-chatter]])* - The slide continued: ~70% before the Sept 30 PCE revision → ~37% after it → **22% as of Monday** (Morningstar), down from 55% immediately after the September hike. December is still largely priced. - Final consensus: headline **+0.5–0.6% m/m / 3.6–3.7% y/y** (a four-month high), but core cooling to **+0.2% / 2.4%**. The split is all energy (~+5.5% m/m, largest energy contribution since March); airfares are the core exception. - Natixis argues September may be "the lone hike of the cycle"; Musalem counters that "more monetary policy firming will be required." The minutes split the difference: a year-end hike "likely," but open mind each meeting. - Calendar: CPI Wed → PPI + retail sales Thu → Warsh in Bangkok Friday, his last word before the Oct 27–28 blackout. **2. New finding — the AI buildout is now a named, committee-level inflation channel** *(new note [[ai-buildout-fed-inflation-channel]])* - The Sept 15–16 minutes show participants flagging core-goods pressure "as effects of the AI buildout appeared to increase while the effects of tariff increases waned," warning AI demand could make "aggregate demand outpace aggregate supply," and citing a higher rate as protection against AI-driven sectoral price gains broadening out. - Strikingly, staff baseline sees **2% inflation only in 2029**, contingent on the AI buildout's price effects fading — and ties the long-end selloff partly to AI borrowing competing for capital. **Household pressure backdrop:** NY Fed one-year inflation expectations hit 3.9% (highest since May 2023); AAA regular gasoline ~$4.37 — the first October ever above $4 (+39% y/y), diesel +72% y/y — while the minutes note energy "weigh[s] disproportionately" on low- and moderate-income households. **Watch status:** No triggers crossed (Brent ~$105 vs $110; gasoline ~$4.37 vs $4.50). The September CPI watch fires tomorrow — next cycle should record it and assess whether the core print killed or revived the October/December hike debate.