The 10-year Treasury note

The Consumer Price Index rose 3.7% year over year in September, higher than the Dow Jones consensus estimate of 3.6%. Core inflation, excluding food and energy prices, came in at 2.6% on an annualized basis, versus the 2.5% consensus estimate.

The yield on the 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — jumped 10 basis points to 5.323%, the highest level since Oct. 8, when it hit 5.354%

The longer-dated 30-year U.S. Treasury

The two-year Treasury

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely.

| Symbol | Company | Yield | Change |

|—|—|—|—|

| US10Y | U.S. 10 Year Treasury | 5.302% | +0.085 |

| US1M | U.S. 1 Month Treasury | 4.024% | +0.043 |

| US1Y | U.S. 1 Year Treasury | 4.583% | +0.114 |

| US2Y | U.S. 2 Year Treasury | 4.91% | +0.117 |

| US30Y | U.S. 30 Year Treasury | 5.616% | +0.053 |

| US3M | U.S. 3 Month Treasury | 4.252% | +0.07 |

| US6M | U.S. 6 Month Treasury | 4.441% | +0.096 |

The latest inflation reading comes just two weeks before the Fed’s next interest rate decision.

With inflation remaining sticky, the central bank may need to raise rates higher and keep them there for longer in 2027, said Christopher Rupkey, chief economist at Fwdbonds.

“The bond bulls have turned around and are running the other way as 10-year yields have shot higher after today’s shocking inflation report,” he said. “Inflation is alive and the only way the Warsh Fed knows how to kill it is with another dose of higher rates.”

Investors also await the September reading for the producer price index, September retail sales data and weekly initial jobless claims figures, all due on Thursday.

The International Energy Agency has cautioned that diesel market constraints will extend well into next year, with supply tightness projected to last until the second half of 2027.

In its October Oil Market Report, the IEA highlighted that a counter-seasonal tightening in gasoil markets during the third quarter, coupled with substantial inventory declines over the preceding months, has critically depleted global stock cover ahead of the peak winter demand season.

Data from the agency indicates that global diesel exports fell by 700,000 barrels per day year-on-year last month, with a loss of 1.3 million barrels per day from Russia and the Middle East only partially offset by increased supply from other sources.

Despite higher prices dampening broader oil demand, diesel demand remains robust due to its relative price inelasticity and government measures aimed at protecting consumers from high prices. The IEA noted that falling inventories, soaring cracks, and steepening backwardation signal the need for additional supplies.

However, even with an anticipated rapid recovery in refinery throughputs by year-end, gasoil supply will be insufficient to meet demand in the fourth quarter of 2026, indicating that inventory replenishment beyond seasonal fluctuations is unlikely before the second half of 2027.

Wholesale diesel prices surged to over $200 per barrel in Singapore in mid-September and reached record highs of approximately $220 per barrel in Europe and the United States. Retail prices have similarly climbed to record levels in most major economies.

The agency also warned that tensions in the crude freight market could lead to further increases in delivered diesel prices in key importing regions such as Europe, Africa, and Latin America. In related developments, U.S. diesel prices hit $6 a gallon for the first time last month, with the ongoing Iran war continuing to disrupt global energy markets.

President Donald Trump announced a deal with Russian President Vladimir Putin for Russia to immediately supply 300,000 metric tons of diesel to the global market, aiming to alleviate price pressures. However, this move faced bipartisan criticism in the U.S. and from European officials, who emphasized that now is not the time to ease sanctions on Russia.

European Commissioner for the Economy and Productivity Valdis Dombrovskis questioned the macroeconomic significance of the deal and Russia’s ability to deliver. Italian Prime Minister Giorgia Meloni warned that the agreement undermines efforts to negotiate with Putin regarding Ukraine.

The IEA forecasts a decline in overall oil demand by an average of 2.6 million barrels per day in 2026, with diesel accounting for 25% of this reduction. Oil supply is expected to decrease by 5.8 million barrels per day annually in 2026, before rising by 7.7 million barrels per day in 2027.

However, the agency cautioned that renewed attacks in the Gulf, including recent strikes on Riyadh by Yemen’s Houthis, could destabilize the market recovery, especially as Saudi production increases in September contributed to OPEC+ supply gains.

Millions of Social Security beneficiaries may see a larger-than-average cost-of-living adjustment in 2027, according to experts’ estimates.

The Social Security Administration is expected to announce the COLA for 2027 on Wednesday with the release of new government inflation data. Social Security experts estimate that the COLA may raise benefits by 3.5% to 3.6% next year, which would be the largest increase in three years.

Yet, even with an above-average increase, beneficiaries may still struggle to cover everyday costs.

More than three-quarters of adults 50 years and older — 76% — said they do not think a projected 3.5% Social Security cost-of-living adjustment for 2027 would be enough, according to an AARP survey published Monday. The poll of 1,023 adults ages 50-plus was fielded between Sept. 17 and 21. The survey had a 4.25% margin of error.

“I would love it if the cost-of-living increase was more generous,” said Donna Dalrymple, a 70-year-old retiree in Manchester, New Hampshire.

Dalrymple retired at age 65 following a cancer diagnosis, she said, which prompted her to claim Social Security benefits and start 401(k) withdrawals five years earlier than she had planned. Today, she worries that other rising costs, particularly those for Medicare, may outpace the annual Social Security benefit increase, she said.

Cost-of-living adjustments have averaged about 3.1% over the past decade, according to the Social Security Administration.

In September, estimates showed the Social Security COLA may be the highest in three years.

The Senior Citizens League, a nonpartisan senior advocacy group, and Mary Johnson, an independent Social Security and Medicare policy analyst, both forecast a 3.5% COLA for 2027. Meanwhile, AARP forecasts a 3.6% increase to benefits.

The last time beneficiaries saw a larger increase was in 2023, when the COLA jumped to 8.7% — the highest in four decades — as a result of soaring inflation. In 2022, beneficiaries saw a 5.9% rise as the inflation rate began to climb.

In 2026, Social Security beneficiaries received a 2.8% boost to their benefits.

A 3.5% Social Security cost-of-living adjustment for 2027 would increase the average benefit check by $67.90 per month — to around $2,008 per month from $1,940 — according to the Senior Citizens League.

How COLA may differ from estimates

AARP’s recent survey found that 7 in 10 adults ages 50-plus said an increase between 5% and 8% would be sufficient to help keep up with the daily cost of living.

The official Social Security COLA announcement expected Wednesday may differ from September’s estimates, since it will include an additional month of inflation data.

A “very stiff jump in inflation” could push the Social Security COLA to 3.6%, Johnson said. But if inflation comes in lower than expected, the COLA may be 3.4%, she said.

Social Security’s cost-of-living adjustment is automatically applied to benefits to help keep pace with inflation.

Since 1975, COLAs have been calculated annually for both Social Security and Supplemental Security Income, or SSI, benefits. However, in some years when there was little to no inflation, the COLAs have been zero.

“People are very, very grateful for it, and they look forward to it,” Social Security Administration Commissioner Frank Bisignano said Monday of the upcoming COLA announcement during an interview with CNBC’s “Squawk on the Street.”

How Medicare costs may affect COLA

Rising Medicare costs in 2027 may limit how much of an increase Social Security beneficiaries see in their monthly checks.

Standard monthly premiums for Medicare Part B, which are typically automatically deducted from Social Security checks, are projected to be $209.50 in 2027, up from $202.90 in 2026. Medicare Part B covers certain medically necessary and preventive services. Some beneficiaries may pay extra surcharges, known as Income-Related Monthly Adjustment Amounts, if their incomes exceed certain thresholds.

Meanwhile, Medicare Part D prescription drug plans may see modest premium increases in 2027, according to an analysis by KFF, a nonpartisan health policy research group. Part D premiums may also be deducted directly from Social Security checks.

The Trump administration recently announced it is sending one-time $90 direct payments to more than 20 million Medicare Part B enrollees to help pay for monthly premium costs.

Dalrymple, the New Hampshire retiree, said she does not think she qualifies for the one-time payment, which excludes millions of Part B beneficiaries through certain eligibility criteria. Dalrymple said she worries about rising Medicare costs for 2027.

“If Medicare cost eats up the cost of living [adjustment], I’m really going to get slammed by the affordability crisis because rents are going up, groceries are going up, gas is going up,” Dalrymple said.

Some Democrats like Sen. Ron Wyden, D-Ore., ranking member of the Senate Finance Committee, have questioned the Trump administration’s motives to send the $90 payments just a month or so ahead of the midterm election. President Donald Trump has separately said the government would send $5,000 to every U.S. adult citizen if Republicans retain control of the House and Senate.

Bisignano told CNBC on Monday that the $90 one-time payments are an example of the Trump administration “taking care of Americans” and working to keep vulnerable individuals, including the elderly, out of poverty.

Kathy Callaghan, 80, of Montpelier, Vermont, said she would have preferred the money had been put in the Medicare trust fund — which is projected to run out of money to fund Part A in 2033 — rather than distributed to Americans through checks.

Callaghan said she plans to donate her $90 check to the Senate campaign of James Talarico, a Democrat and Texas state representative running for the U.S. Senate.