FIN · T13
Can the AI trade survive a 10-year Treasury above 5% and an oil shock at the same time?
From February 27 to October 8, 2026, the 10-year Treasury yield rose 125 basis points, 115 of them real yield, while breakeven inflation rose 10, by DeepStack's reading of FRED. Retail diesel set a record in the week of September 21, 71% above the week of February 23, by the EIA's survey. The oil shock reaches the AI trade through the Fed and the real yield.
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The boom pays the rate
Nominal growth, fed by deficits and AI spending, runs faster than the 10-year, so a yield above 5% is the price of the boom, not its end.
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The two shocks compound
Diesel leaks into core prices, the Fed hikes into it, and AI borrowing bids up the long end until stocks give way.
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The questions
Settles Dec 31open
Does the 10-year Treasury constant-maturity yield (FRED series DGS10) close at 5.50% or higher on any day from October 16, 2026 through December 31, 2026 for which FRED reports a value?
Settles Jan 12open
Does the U.S. Energy Information Administration's Short-Term Energy Outlook of January 2027 put the average Brent crude oil spot price for the fourth quarter of 2026 above $105 a barrel?
Settles Apr 1open
Does the 5-year, 5-year forward inflation expectation rate (FRED series T5YIFR) average more than 2.60% over the days of March 2027 for which FRED reports a value?
Settles Mar 31open
Does the C Fund of the Thrift Savings Plan, the federal employees' S&P 500 index fund, close at or below 90% of its highest closing share price since October 16, 2026, on any business day from October 16, 2026 through March 31, 2027?