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Overnight, the battle between markets and the Federal Reserve tilted hawkish: Minneapolis Fed President Neel Kashkari brushed aside Wednesday’s cool inflation reading, the dollar jumped to a 16-month high, and the 10-year Treasury yield touched 5.33%, its highest since 2002 — while Japan’s Nikkei surged over 3% on semiconductor strength. Back in the U.S., a Reuters exclusive revealed that lenders are pushing back on Nvidia’s $500-billion plan to finance the AI boom with chip-backed loans, and Citigroup reversed its summer bearishness to call for Bitcoin at $113,000 within a year. Crude oil slipped back below $100 as Saudi Arabia brought Gulf exports back online — easing one of September’s biggest inflation scares.
1. Kashkari Shrugs at Cool PCE; Dollar Hits 16-Month High
Minneapolis Fed President Neel Kashkari said Wednesday that the cooler-than-expected August inflation print did little to change his view of policy. Speaking at the Council on Foreign Relations in New York, Kashkari said: “I didn’t think the inflation data today really changed that story for me very much,” and repeated his expectation of at least one more rate hike before the end of the year. He also hinted that the economy’s neutral interest rate may be higher than policymakers have assumed — a hawkish signal that current rates may be doing less to restrain demand than they appear.
The timing matters. Wednesday’s core PCE came in at 3.0% year-over-year versus 3.3% expected, which slashed the market-implied odds of an October rate hike from 73% to roughly 39% (LSEG). Kashkari’s comments pulled the other way: the dollar index (DXY) rose to 101.848, its highest in 16 months, the euro sank to a 16-month low of $1.1286, and the 10-year Treasury yield climbed in early Thursday trading. ING’s Chris Turner noted the inflation data “barely put a dent in Fed tightening expectations,” with markets still pricing nearly four more rate increases by the end of next year.
Why this matters: the market and the Fed are now openly disagreeing. The soft PCE print gave October-hike skeptics ammunition, but Kashkari’s pushback — plus still-resilient growth data and Friday’s nonfarm payrolls ahead — is why bonds never got real relief. With September CPI due October 14, the data gauntlet continues. Related reading: 10-Year Treasury Yield Hits 5.30%, Highest Since 2002
- DXY at 101.848 — 16-month high; euro at 16-month low of $1.1286
- October hike odds: ~39% (down from 73% before the PCE print)
- Markets still price nearly four more rate increases by the end of next year
- Next catalysts: Friday’s nonfarm payrolls, September CPI on October 14
2. Lenders Push Back on Nvidia’s Plan to Finance the AI Boom
In a Reuters exclusive published Thursday, bankers and asset managers raised fresh doubts about Nvidia’s roughly $500-billion financing plan — the idea that its advanced AI chips, and the revenue they generate, can serve as long-term collateral for chip-backed loans. Some lenders are demanding higher guarantees than Nvidia originally outlined, questioning how long the revenue stream from any given generation of chips will actually last, according to banking sources and credit managers.
“Wall Street is much more conservative,” Tony Trzcinka, a senior portfolio manager at Impax Asset Management, said of Nvidia’s claim that its most specialized chips can earn revenues for a decade. Nvidia pushed back: a spokesperson told Reuters that “AI compute is a productive, durable and fungible asset that can support long-term financing,” adding that partners independently assess each deal and that “financing structures will vary as this market develops.”
Why this matters: the AI buildout is increasingly being funded on credit — Tesla just lined up $30 billion in bank credit lines for its own AI and robotaxi plans. If lenders won’t accept compute as collateral at Nvidia’s assumed value, the cost of funding the AI boom rises for everyone. This is no longer just an equity story; it’s becoming an AI-credit story. Related reading: Tesla Lines Up $30B in Credit to Fund AI, Robotaxi Buildout
- $500 billion — size of Nvidia’s financing plan now under lender scrutiny
- The doubt: whether AI chips work as long-term loan collateral
- Reuters sources say some deals in the pipeline already offer stronger guarantees
3. Citi Reverses Course: Bitcoin to $113,000 Within 12 Months
Citigroup sharply raised its 12-month price target on Bitcoin to $113,000 from $82,000 — a roughly 38% increase — and lifted its Ethereum target to $3,028 from $2,240, according to a note to investors cited by Reuters. The bank pointed to stronger crypto market activity, a more supportive macro backdrop, and a resumption of exchange-traded fund inflows. Bitcoin and ether have rallied nearly 40% and 68% respectively over the past three months, and Bitcoin is holding near $84,000 while Ethereum trades around $2,700.
The reversal is striking: Citi started 2026 with a $143,000 Bitcoin target, cut it to $112,000 in March after the CLARITY Act stalled in the Senate Banking Committee, and cut again to $82,000 in July on weak ETF demand and fears that digital-asset treasury companies could become net sellers. The new $113,000 target still sits below Bitcoin’s record above $126,000 set in October 2025. The bank added that the CLARITY Act setback narrowed the path toward a broader crypto market-structure bill but did not derail the outlook.
Why this matters: sell-side capitulation cuts both ways, but Citi’s specific reasoning — ETF inflows resuming — is the one signal that historically leads institutional demand. Retail sentiment on Stocktwits remains bearish even as price holds up, a classic contrarian setup. Separately, the new Open USD (OUSD) stablecoin launched with Coinbase, Mastercard, Stripe and Visa committing $1 billion in liquidity, per CoinDesk — a reminder that crypto infrastructure is being built regardless of what Congress does.
- $113,000 — Citi’s new 12-month Bitcoin target (was $82,000)
- Ethereum target raised to $3,028 (was $2,240)
- BTC/ETH up ~40%/68% over three months; still below the Oct 2025 record above $126,000
4. Brent Slips Below $100 as Gulf Oil Exports Recover
Crude oil retreated from the $100 line on Thursday: Brent futures traded around $97–$98.50 a barrel and WTI around $89–$90.35, down roughly 1% on the day after Brent’s 14% September surge — its biggest monthly gain since July. The pullback came on concrete signs that supply is normalizing: Saudi Arabia resumed tanker loadings at Yanbu after restarting flows through the East-West Pipeline, which routes crude around the Strait of Hormuz; Middle East crude exports have recovered toward pre-conflict levels; and an unexpected build in U.S. crude inventories eased physical tightness.
The geopolitics haven’t resolved, though. U.S.-Iran talks remain stalled — Qatar continues shuttle diplomacy while President Trump has denied reports he offered Iran sanctions relief or frozen-fund releases. OPEC+ meets Sunday and is expected to hold November output targets steady. The market is now binary around the $100 line: a confirmed diplomatic breakthrough could take Brent toward the low-$90s, while a new escalation could send it back above $110 in days.
Why this matters: the September oil shock was one of the main drivers of the Fed’s hawkish turn. If supply keeps normalizing, that inflation pressure eases — good news for rate odds and, by extension, stocks and bonds.
- $100 — the line Brent failed to hold; now trading ~$97–98
- Saudi East-West Pipeline restart; Gulf exports near pre-conflict levels
- OPEC+ meets Sunday, expected to hold November targets
Discussion: Kashkari says inflation is still too high and sees another hike this year, but markets price October odds at just 39%. Who’s reading the economy better — the Fed, or the futures market? Share your take below.
Sources:
- https://www.morningstar.com/news/dow-jones/202610011996/dollar-hits-16-month-high-on-prospect-of-higher-us-rates-update
- https://www.lapost.com/content/fed-s-kashkari-says-central-bank-must-lower-inflation-pressures
- https://www.reuters.com/legal/transactional/nvidias-bet-that-its-chips-can-finance-ai-boom-gets-wall-street-reality-check-2026-10-01/
- https://stocktwits.com/news-articles/markets/cryptocurrency/btc-price-target-citi-raises-bitcoin-forecast-to-113-k-ethereum-target-to-3028/cZD0Tp0RBi1
- https://coinjuice.com/research-hub/what-happened-in-bitcoin-today-october-1-2026
- https://www.5paisa.com/blog/crude-oil-price-today-brent-trades-near-9856-wti-at-8870-after-indian-market-close-on-october
- https://hdfcsky.com/news/brent-crude-oil-price-today-october-1-2026-brent-crude-falls-0-7percent-to-97-3-wti-down-0-9percent-as-us-iran-talks-gulf-supply-in-focus
- https://coincentral.com/pre-market-update-stocks-mixed-as-fed-comments-and-treasury-yields-weigh-on-wall-street/
Auto-posted by the Bull Lounge news desk.
Not financial advice.
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