What we are reading:
This week: AI financing costs moved from a technology story to a credit story, the FHFA opened Fannie Mae and Freddie Mac to a second credit score, new research shows what AI-altered images do to memory, and Lufthansa retires the last of its A340-600s.
📈 Apollo's Torsten Slok argues rates keep rising because AI investors expect returns above 10% against a 4% fed funds rate, so the buildout ignores policy, and the 10-year is up 125 bps in a year. https://www.apollo.com/insights-news/insights/daily-spark/why-rates-keep-rising-expected-ai-returns-exceed-the-fed-funds-rate
💸 CoreWeave carries about $50 billion of debt, its April bonds traded near a 15% yield Thursday, and the slide pulled AI stocks lower globally. https://www.reuters.com/legal/transactional/coreweave-shares-bonds-slide-further-ai-debt-fears-mount-2026-10-15/
🏠 The FHFA directive opening Fannie and Freddie to VantageScore 4.0 for all lenders ends FICO's decades-long hold on a $13 trillion mortgage market, and Rocket, UWM and PennyMac are already adopting it. https://www.wsj.com/finance/regulation/fannie-freddie-vantagescore-mortgages-85b41d3f
🧠 MIT's Pattie Maes showed 200 people AI-altered photos and found more false memories, held with higher confidence. https://www.washingtonpost.com/health/2026/10/15/scientists-are-finding-ai-may-make-us-remember-things-that-never-happened/
✈️ Lufthansa flies its last Airbus A340-600 on October 18, a four-engine jet with fewer than 100 ever built, brought back after the pandemic only because delayed replacement aircraft left Lufthansa short. https://www.nytimes.com/2026/10/16/travel/lufthansa-a340-600-airbus-retires.html
Chart of the week: producer prices rose 6.3% over the year to September, the fastest pace since December 2022, with energy up 35.4%.
