Capital Markets Update: a hot CPI, and a 10-year that still came down.

This week in one paragraph

Inflation ran hotter, and long rates still eased. The September consumer price index, released October 14, rose 0.6% on the month and 3.7% from a year earlier, with gasoline accounting for more than half of the monthly increase. The 10-year Treasury closed at 5.13% on October 21, down 15 basis points from 5.28% on October 7. Fed officials who spoke before the blackout leaned toward another increase by year end, and the next decision comes October 28. In credit, Trepp's special servicing rate reached its highest level since 2013, while retail delinquency fell. For borrowers, fixed-rate pricing is a little better than two weeks ago. It is still about a point above January.

Rates

Long rates gave back some of their run. The 10-year closed at 5.21% on October 13, 5.19% on October 14 after the inflation report, and 5.09% on October 16, before settling at 5.13% on October 21. That is still 94 basis points above January 2 and 17 above a month ago. The 5-year was 4.95%, and the 2-year was little changed at 4.81%. SOFR, the base for floating-rate loans, has held between 3.87% and 3.89% since October 13. Prime is 7.00%.

Why. The inflation news was mostly energy: in the BLS release, as reported by Kiplinger, "the index for gasoline rose 9.1 percent in September, accounting for over half of the monthly all items increase." Spending held up too. The Census Bureau reported on October 15 that September retail sales rose 0.8% on the month and 6.3% from a year earlier. Bonds rallied late in the week anyway. Penn Mutual Asset Management, citing CNBC, said the 10-year traded up to 5.33% after the CPI release and then reversed as investors sold AI stocks and bought Treasuries. The 30-year and 20-year reopenings drew bid-to-cover ratios of 2.54 and 2.73, at 5.618% on October 8 and 5.469% on October 21.

What the Fed is saying. On October 8, Governor Waller said, "If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2 percent goal." He added that 16 of the 18 participants who submitted September projections expected at least one more increase this year. On October 13, Boston Fed President Collins said she expects "it will be appropriate to raise rates a bit further before the end of the year." Chair Warsh, in Bangkok on October 16, declined to signal timing: "I don't prejudge meetings." The Beige Book, released October 14, found "Higher oil prices permeated all District reports," while "labor market conditions were little changed." Our read: the hiking case got stronger this month, and the market has priced much of it already. The decision comes October 28, without new projections.

What it means for loan pricing

Fixed-rate loans price over a Treasury; floating-rate loans over SOFR. Below, we add spreads implied by loans we arranged and by public data to today's base rates. Indicative, not quotes: leverage, sponsor, property and prepayment terms move any single loan.

• Bank permanent, multifamily: about 6.2% to 6.8%. Our bank apartment loans closed at 5.40% in August 2025 (10-year 4.22% to 4.34% that month), 5.41% in September 2025 (4.01% to 4.28%) and 6.085% in July 2026 (4.48% to 4.75%): roughly 105 to 160 basis points over the 10-year. Added to 5.13%, that is about 6.2% to 6.7%. CBRE's average second-quarter multifamily spread of 162 basis points, added to today's 5-year (4.95%) or 10-year, gives 6.57% to 6.75%.
• Bank permanent, office and retail: about 6.2% to 7.2%. Our anchored retail center loan in Banning closed at 5.62% fixed in May 2025, 104 to 137 basis points over that month's 10-year, which gives about 6.2% to 6.5% today. Our Tarzana office refinance closed at 5.70% in September 2025, 142 to 169 over, which gives about 6.6% to 6.8%. CBRE's 204 basis point average commercial spread gives 6.99% to 7.17%.
• CMBS conduit, hotels: about 6.8% to 7.4%. Bridge's Q2 2026 hotel report, citing CRED iQ, put second-quarter hotel conduit coupons at about 6.3% to 6.5%, when the 10-year ran 4.26% to 4.67%, a spread of roughly 165 to 225 basis points. Added to 5.13%, that is about 6.8% to 7.4%.
• Bridge and transitional, debt funds: about 7.4% to 8.9%, before points. For hotels, the same Bridge report put transitional debt at SOFR plus 350 to 500 basis points: 7.38% to 8.88% with SOFR at 3.88%. Our 8.50% debt fund bridge in Venice in October 2025, when SOFR ran 4.04% to 4.31%, sat about 420 to 445 over SOFR, or about 8.1% to 8.3% today. Our 8.00% retail and office bridge at 8560 Wilshire in March 2026 (SOFR 3.62% to 3.71%) works out to about 8.2% today.
• SBA 504 for owner-users. Published CDC rate sheets show the September 10 debenture pricing at 6.54% for 25-year and 6.53% for 20-year terms, including ongoing fees. The 10-year closed at 4.95% that day, 18 basis points below where it is now.

Read across, fixed-rate pricing is about 15 basis points better than two weeks ago and still about a point higher than in January, nearly all of it from the Treasury. Floating-rate pricing has barely moved, because SOFR is up only 13 basis points since January 2. With the Fed leaning toward another increase, price a rate cap or a fixed-rate option next to any floating quote before you sign.

Credit and lending conditions

• CMBS delinquency (Trepp, September). 8.02%, up 17 basis points and the highest since November 2020. Office 12.16%, up 16. Multifamily 8.04%, up 35, the largest increase of any property type. Lodging 6.18%, up 34. Retail 6.58%, down 62 "on the mall cures." Industrial 1.14%, unchanged.
• Special servicing (Trepp, September, released October 13). 11.49%, up 7 basis points and the highest since February 2013. Office 16.85%, retail 13.84%, mixed-use 13.17%, lodging 8.95%, multifamily 8.54%, industrial 1.23%.
• Originations (MBA, second quarter). Up 16% from a year earlier and 12% from the first quarter. Retail rose 61%, office 47% and multifamily 8%. By source, CMBS rose 68% and depositories 61%, while Fannie Mae and Freddie Mac fell 17%.
• Spreads and leverage (CBRE, second quarter). Average commercial spreads of 204 basis points, 21 tighter than a year earlier; multifamily 162, 15 tighter. Average loan-to-value 59.6%, debt yield 10.2%. Alternative lenders made 38% of non-agency closings and banks 30%, up from 24%. CBRE describes lenders as competing on price rather than leverage.
• Shopping centers (Cushman & Wakefield, third quarter). National vacancy held at 5.9%, with 3.5 million square feet of net absorption and asking rents up 2.2% from a year earlier.
• Bank standards (Federal Reserve Senior Loan Officer Opinion Survey, July). In the latest survey, covering the second quarter, banks on net eased standards for commercial property and multifamily loans and left construction standards unchanged, with weaker construction demand. No date is posted yet for the next survey.

Put together: capital is available and priced competitively for stabilized, well-documented property. The stress sits mostly with large loans written at lower rates, in office and malls, that now have to refinance at these.

What we are seeing

• Strip centers finance on the rent roll. Lenders are active on neighborhood retail, but one rolling lease can cut proceeds. In our worked example, a 4,000 square foot drugstore with no renewal takes about $950,000 off a $7.1MM refinance. See strip center loans in 2026.
• Apartment refinances are capped by coverage, not value. In our worked example, a $6.0MM Los Angeles building returns about $455,000 less cash at early October rates than at the 5.40% we closed in 2025. See cash-out refinancing an LA apartment building.
• Office has split in two. Small, well-leased office still finances with banks, as our Tarzana refinance did at 5.70%. Lease-up goes to debt funds. See office financing in 2026.
• Hotel bridges price off SOFR, but the exit prices off the 10-year. Our $7.5MM Venice hospitality bridge closed at 8.50% in two weeks. See hotel bridge loans in 2026.
• Land carry floats. On a $3.0MM land loan, each 25 basis point move in SOFR changes interest by $7,500 a year. See land development loans in California.

Dates to watch

• October 27 to 28: FOMC meeting, with the decision October 28. No economic projections at this meeting.
• October 29: third-quarter GDP, advance estimate, and September personal income and PCE prices (BEA).
• Early November: Trepp's October CMBS delinquency report.
• November 6: October jobs report (BLS).
• November 10: October consumer price index (BLS).
• November 17: October retail sales (Census).
• November 25: October PCE prices and the second GDP estimate (BEA).
• December 8 to 9: FOMC meeting, with updated projections.

This briefing updates every week at this address. If you have a maturity, refinance or acquisition in the next twelve months, send us the numbers. We will tell you within two business days what the market will lend, from which kind of capital, and at what indicative cost.

Sources. Treasury yields: U.S. Treasury daily par yield curve, July 2025 through October 21, 2026, and Federal Reserve H.15, released October 21, 2026. SOFR: Federal Reserve Bank of New York, through October 20, 2026. Prime and effective fed funds: Federal Reserve H.15, released October 21, 2026. Fed decision: Federal Reserve, September 16, 2026. Meeting calendar: Federal Reserve. Speeches: Waller, October 8, 2026; Collins, October 13, 2026; Warsh via Axios, October 16, 2026. Beige Book: Federal Reserve, October 14, 2026. Inflation: BLS September CPI, released October 14, 2026, via Kiplinger. Retail sales: Census Bureau, October 15, 2026. Market moves: CNBC via Penn Mutual Asset Management, October 19, 2026. Auctions: TreasuryDirect, October 8 and 21, 2026. Release calendars: BEA, BLS CPI and BLS jobs schedules, and Census. CMBS delinquency: Trepp, October 2, 2026. Special servicing: Trepp, October 13, 2026. Originations: MBA, August 6, 2026. Spreads and leverage: CBRE Lending Momentum Index, August 3, 2026. Shopping centers: Cushman & Wakefield, October 14, 2026. Conduit coupons and transitional spreads: Bridge, Hotel CRE Quarterly Q2 2026, August 4, 2026. Bank standards: Federal Reserve SLOOS, July 2026, updated August 3, 2026. SBA 504: published CDC rate sheets (one, two), September 10, 2026 pricing, viewed October 7, 2026. Spreads implied by Piccard closings are computed from each closing's note rate and the range of the benchmark in its closing month; the pricing ranges are arithmetic, not quotes.

Rates and terms referenced are drawn from public market data, transactions arranged by Piccard Financial and recent lender quotes, reflect conditions on the dates shown, and change with the market. Nothing here is an offer or a commitment to lend. Piccard Financial is a capital markets advisory firm, not a lender.