0911 | Remembering 9/11, Inflation Heat, and the AI Money Wave

Mia: Welcome back to the show, everyone. I'm Mia.

Milo: And I'm Milo. It's been one of those days where the markets and the calendar collided — a hot inflation print on the twenty-fifth anniversary of September 11th, an oil shock tied to the Iran war, and an AI debt machine that just keeps accelerating.

Mia: Yeah, and those threads actually connect more than you'd think. Energy prices are feeding into inflation, inflation is feeding into rate bets, and the AI buildout is shaping how companies are financing through all of it. So let's start with something that's bigger than markets today — the remembrance itself — and then we'll work our way into the tape.

Milo: Twenty-five years since September 11th, 2001. Families returned to the World Trade Center site on Friday to read the names of the dead, a milestone anniversary of a tragedy that reshaped America. Hijackers flew planes into the Twin Towers and the Pentagon that morning, killing thousands.

Mia: And no company embodies that day quite like Cantor Fitzgerald. They lost 658 employees in the attacks. And twenty-five years later, they've turned their worst day into one of Wall Street's biggest days of giving. Chairman Brandon Lutnick and Executive Vice Chairman Kyle Lutnick explained how employees now waive a day's pay for Charity Day — they raised a record $15 million last year through the Cantor Fitzgerald Relief Fund, and they were determined to top that this year.

Milo: And it wasn't just the trading floor. Cantor's annual Charity Day brought in public figures from sports and entertainment. The Nader sisters — Brooks, Mary Holland, and Grace Anna — were there, reflecting on September 11th and giving back with City Harvest. Former Knick Allan Houston was there too, talking about charity efforts. And former Rangers goalie Henrik Lundqvist sat down to remember those lost in the attacks.

Mia: On a parallel note, there's another story of rebuilding that's worth remembering. Dan Chung, the CEO and chief investment officer at Fred Alger Management, survived the attack by chance. Thirty-five of his colleagues died, and he was tasked with reconstructing the firm. He's still running it today, still finding the market's winners.

Milo: And downtown itself has transformed. Lower Manhattan used to be a business district that emptied out after work. Now the population has more than doubled since 9/11. Nearly 25,000 new residential units have been added, and the workforce has diversified — financial services now represents just 25 percent of occupied downtown space. It's become a hub for housing, culture, and nightlife.

Mia: What's unknown, honestly, is what the next twenty-five years look like for that neighborhood. But from Wall Street's perspective, the symbolism today — remembrance and giving on one floor — is striking.

Milo: Alright, let's turn to the tape. August CPI, and the core number — excluding food and energy — came in hotter than expected. That bolstered the case for Fed officials to raise interest rates next week.

Mia: And the bond market felt it. The $32 trillion Treasury market ended what Bloomberg called a bruising week, with yields pushing to multi-year highs. Investors are now more convinced the Fed will hike next week to address sticky inflation. Yields remain near those multi-year highs as traders digest the report.

Milo: Which puts Kevin Warsh in a tough spot. The analysis out there is that hot CPI puts his Fed credibility on the line before the rate decision — he has to choose between acting on his inflation warnings or risking new doubts about his control of the central bank. That's the framing, and it's a fair one. He's been vocal on inflation; now the data is testing him.

Mia: Let's be careful to separate facts from interpretation here. The facts: core CPI rose more than expected in August. Treasury yields are near multi-year highs. Hike bets firmed after the report. The interpretation: whether Warsh hikes or blinks, and what that does to his credibility — that's the open question. We genuinely don't know what the Fed does next week.

Milo: The inflation detail is interesting too. It remained stubbornly high in August, largely on the back of higher energy prices amid the Iran war, economists said. So even though we're talking about the core number today, the headline pressure has an energy story underneath it.

Mia: And that's showing up in things voters actually feel. Ground beef prices edged higher in August, signaling little progress in the administration's push against record food costs, with only two months left until the midterms. Consumer sentiment is souring — even Republicans are souring on the economy, according to one report that called it the first interesting consumer sentiment read in a long time.

Milo: There's a knock-on effect there too. New estimates point to a Social Security cost-of-living adjustment for 2027 of roughly 3.5 to 3.6 percent — that would be the highest in three years, driven by the same government inflation data. So high inflation does get partially recycled back to beneficiaries, but with a lag.

Mia: Stocks, meanwhile, were still looking at a higher open on Friday despite the hot core print. Jim Cramer's morning list noted that. So equities initially shrugged — but the bond market's message was louder.

Milo: And if rates are going higher, that's gravity for asset prices, as Warren Buffett put it. Mike Khouw's take was that if the options market is correct, things could get heavy for bonds. That's a setup, not a forecast — but it's the mood in the rates complex.

Mia: Which brings us directly to the biggest driver of that inflation: the Iran war and the oil shock. Trump told Fox News' Laura Ingraham he has no regrets about starting the war, saying he would have attacked Iran despite the impact on the midterm elections. And the U.S. is dialing up economic pressure.

Milo: The specifics: Treasury Secretary Scott Bessent said a large bank will be sanctioned on Monday as part of the Iran strategy. That's a concrete thing to watch next week. And the sanctions on additional Iranian airlines are threatening permanent damage to an already badly bruised industry — all but severing the country's limited air connections to the rest of the world.

Mia: On the oil side — prices fell on Friday, which snapped multiday winning streaks for both Brent and WTI, but both posted sharp weekly gains as Middle East tensions rose. So the week's direction was up, and then a Friday pause.

Milo: And the geopolitical picture around supply got worse, not better. Iranian-allied Houthi militants in Yemen escalated strikes on Saudi Arabia this week, and Saudi Arabia shut down its East-West crude oil pipeline after multiple attacks. Separately, the Houthis reportedly advanced to a key Red Sea island, raising the threat to shipping near the Bab el-Mandeb Strait — the waterway connecting the Red Sea to the Gulf of Aden and global markets.

Mia: For anyone wanting a supply-side color report, CNBC was one of just a handful of news organizations allowed to travel to Caracas with the U.S. secretary of energy for Venezuela's new oil deals. And on the diplomatic front, Iranian President Masoud Pezeshkian and Russian President Vladimir Putin criticized Western sanctions and urged the BRICS bloc to deepen trade ties.

Milo: Now the price forecast everyone's talking about: veteran commodities strategist Jeff Currie sees an extremely high chance of $5 a gallon gasoline by the midterms, citing a combination of scarcity and currency debasement. That's his view — a strategist call, not a settled fact — but if you're thinking about the midterm backdrop, it's a loud one.

Mia: And there's a real financial transmission channel here. Oil near $100 is testing private credit borrowers already burdened by high debt costs. Leveraged borrowers in energy-exposed sectors could get squeezed further, especially if inflation pushes interest rates higher again. So the oil shock isn't just a commodities story — it's flowing into credit markets.

Milo: What's unresolved: how high prices actually go, and how voters respond. Both are open questions with real market and political consequences.

Mia: Okay, from oil to the other big capital-absorbing machine: AI. Oracle posted 30 percent revenue growth fueled by AI cloud demand — cloud infrastructure revenue jumped 121 percent from a year earlier. But here's the flip side: its debt has hit $125 billion.

Milo: That debt number matters because Oracle isn't alone. U.S. convertible bond sales have hit their highest annual total on record, according to Bloomberg data, as companies look to fund heavy AI-related spending. And Cantor Fitzgerald's co-CEO Christian Wall — speaking from the firm's New York headquarters — broke down a record 2025, a more complicated 2026, and why he thinks AI infrastructure will drive trillions of dollars in new debt issuance.

Mia: Trillions. That's the scale being discussed. And it's showing up in individual names: Dell stock jumped on an RBC initiation — the stock is up nearly 350 percent in 2026, and RBC noted Dell sold about $16.4 billion of AI servers in its second quarter alone.

Milo: And there's smart money positioning in the space. Leopold Aschenbrenner's Situational Awareness has been buying options positions in stocks including Advanced Micro Devices, Bloom Energy, and CoreWeave, according to sources who spoke to CNBC's David Faber. That's reported positioning, not a recommendation — but it tells you where the speculative attention is.

Mia: The buildout has a cost side too, and it's hitting politics. Pennsylvania Governor Josh Shapiro's new restrictions on data center development threaten a key source of demand growth for shale gas producers in the state, according to an industry trade group. So data centers and gas demand are now linked in state policy debates.

Milo: Internationally, the UAE plans to invest 40 billion euros — about $46.4 billion — in Germany, with data center infrastructure a key part of the package. So the capital is global, and it's chasing power and land wherever it can get them.

Mia: And then there's the safety debate running alongside all this. Two high-profile incidents in the AI industry prompted big questions about safety and the future of humanity — that was Bloomberg's Big Take podcast this week. More than a dozen insiders from OpenAI and Anthropic called for a slowdown, and members of Congress are calling for AI regulation after a researcher warned the companies are acting irresponsibly.

Milo: Trump, for his part, dismissed AI extinction risks, saying he isn't concerned AI could cause human extinction, even as researchers warn about rapid advances and lawmakers propose safeguards. So you have a genuine policy standoff.

Mia: The material uncertainty for investors: whether these AI debt loads prove sustainable. Oracle's carrying $125 billion against explosive growth. Convertible issuance is at records. If rates stay high — which ties right back to that CPI print — the cost of funding all this gets heavier.

Milo: Alright, let's wind down with a faster round — strategies, sentiment, and a few feel-good stories. First, the wealthy-investor trade: total assets in tax-aware long-short strategies — TALS — have surged to more than $170 billion, according to Tax Alpha Insider. Billions are pouring in despite the risks.

Mia: On the bond side, Bank of America says investors who loaded up on European and UK government bonds in recent months are likely experiencing buyers' regret after a sharp selloff. And there's a corporate wrinkle: South East Water is reevaluating its plans to tap capital markets for debt after initial talks with bond investors stalled over pricing. When pricing stalls, deals stall.

Milo: On stock selection mechanics, Investor's Business Daily flagged that liquidity matters — average daily volume below 400,000 shares can be a red flag, but there are other ways to gauge a stock's liquidity. They highlighted Nutex Health moving into the 80-plus relative strength rating. It's a screening tool, not a signal to trade.

Mia: And the Investing Club's Homestretch made the case that an industrial gas giant deserves its premium valuation and should be owned — that's their argument, and we're reporting it as their view.

Milo: A couple of governance and public-health notes: election officials have banned certain public workers from trading on prediction markets ahead of the midterms, to reassure the public about election integrity. And the CDC says the record U.S. cyclosporiasis outbreak is over — it was linked to shredded iceberg lettuce from Taylor Farms and sickened more than 12,000 people.

Mia: On the giving side, the nonprofit Freefrom received $2 million from Olivia Rodrigo and Melinda French Gates — money that came through Rodrigo's Daisy Chain Music Festival — and it wants to give cash directly to abuse survivors. That funding helped the organization hit its annual financial goal.

Milo: And we can't end without the Baklava Guy. NYC's Baklava Guy — a 30-year-old entrepreneur behind Good Baklava — started selling Turkish pastries as a joke, went viral handing out free pastries after Knicks games and selling to strangers in local parks, and now brings in $20,000 a month. He says it's his whole life.

Mia: There's something fitting about that on a day when New York was remembering and rebuilding — the city keeps making new stories out of old streets.

Milo: It really does. So to recap the tape, briefly: hot core CPI, yields at multi-year highs, hike bets firmed for next week under Warsh. Oil up on the week on Iran war escalation, with a large bank sanction due Monday. AI capex driving record convertible issuance and Oracle's debt load. And everyone waiting on the Fed.

Mia: The things to watch: Monday's bank sanction, the Fed decision next week, gasoline prices heading toward the midterms, and whether AI debt keeps scaling. That's the show for today. Thanks for listening — I'm Mia.

Milo: And I'm Milo. We'll see you next time.