Fed Ducks A Hike Despite Hot CPI As Goldman Warns "Both Wings Of The Distribution Have Got Fatter"

The bond market has finally found something it likes about AI: weakness.

For most of 2026, the two biggest macro drivers - the AI capex boom and the Iran war energy shock - were pulling in the same direction, pushing yields to multi-decade highs. That partnership is now over. Ten-year Treasury yields have retraced just over 30bp from the highs, helped by Thursday's 17bp plunge, the biggest one-day drop since March 2023, which took the 10Y back below 5% for the first time in a month. And as Goldman FICC's Cosimo Codacci-Pisanelli writes in his latest "Macro Roadmap" note (available to pro subs), the reason is the same thing that drove yields up in the first place:

Long Duration Is The Equity Hedge Again (For Now)