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Original headline: AI debt trouble could help Fed’s Warsh get his way with fewer rate hikes
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Kevin WarshFedinterest ratesbondsartificial intelligence
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Related tickers and likely impact
DXY
▼ Likely negativeRelevance: high
| Market | Currencies |
|---|---|
| Close on 10/26/2026 | 102.02 |
| Change that session | +0.27% |
XAU/USD
▲ Likely positiveRelevance: medium
| Market | Gold |
|---|---|
| Close on 10/26/2026 | 4,017.27 |
| Change that session | +0.54% |
BTC/USDT
▲ Likely positiveBitcoin
Relevance: medium
| Market | Crypto |
|---|---|
| Exchange | Binance |
| Sector | Layer 1 |
| Market cap | $1.6T |
| Close on 10/26/2026 | 80,150.56 |
| Change that session | 0.00% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Treasury yields tick higher ahead of Federal Reserve interest rate decision
Bond yields edged higher early Wednesday as investors awaited the Federal Reserve's policy decision, due later in the session. The 10-year Treasury yield, the main benchmark for mortgages, auto loans and credit card debt, rose more than 2 basis points to 5.0134%, while the 2-year yield, which tracks short-term Fed moves, rose 1 basis point to 4.7494%. The 30-year yield climbed more than 1 basis point to 5.3200%. CME FedWatch data showed a 90.6% probability that the FOMC will keep rates unchanged at 375-400 basis points, while expectations for a 25 basis point hike at the Dec. 9 meeting stood at 76.5%. Investors will watch Fed Chair Kevin Warsh's statement for signals on future policy, and Thursday's PCE inflation, GDP and personal income data for more insight into the economy.
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The Fed is expected to hold its policy rate at 3.75-4% at its 27-28/10 meeting, even though September CPI and PPI both rose more than forecast and inflation has made little progress back toward the 2% target. Chair Kevin Warsh gave no signal on 16/10 that would change market expectations, cutting the odds of an October hike to about 15%. Robert Kaplan of Goldman Sachs said doing nothing is the option with the fewest hurdles, while Claudia Sahm argued the Fed has enough reason to act this week. The 10-year Treasury yield, which topped 5.3%, the highest in 24 years, fell 0.19 percentage points to 4.95% on 22/10 as tech stocks were sold off. Fed officials remain divided, with Logan, Hammack and Kashkari having opposed the July decision to hold rates.
- Breitbart Business Digest : The Bond Market Is Already Doing Warsh Work
The author agrees with Greg Ip of the Wall Street Journal that AI investment is vulnerable to tighter financial conditions, but notes that such tightening can come from capital markets rather than only from the Fed. At his September 16 press conference, Fed Chairman Kevin Warsh attributed rising long-term Treasury yields to stronger growth and competition for capital from hyperscalers building AI infrastructure. Fed officials including Lisa Cook and Philip Jefferson have argued that the natural rate of interest may be rising because of AI-driven investment and faster productivity growth. The article suggests that if long-term yields are already rising, the Fed may not need to raise its overnight rate as much, while higher yields are already making mortgages more expensive.
- Fed Minutes Show Another Rate Hike Is Likely This Year as Kevin Warsh FOMC Battles Persistent Inflation . Here Why That Signal Matters for Stocks and Bonds Heading Into Year - End .
Minutes from the latest Federal Open Market Committee (FOMC) meeting, released Oct. 7, indicate Kevin Warsh and fellow policymakers are considering another rate hike in 2026. Inflation remains sticky, with CPI up 3.7% year over year in September 2026, so after September's increase the Fed may raise rates again before year-end, by a small or moderate amount. The article explains that higher rates raise borrowing costs, which can curb consumer spending and business investment and typically weigh on stocks. It argues the current tightening appears smaller than in 2022, when the S&P 500 fell about 19% and the Nasdaq-100 about 33%, so investors should be cautious but not panicked. For bonds, rising rates typically push yields up and prices down, which can make bonds more attractive when U.S. government yields reach 5% or higher.
- Fed Minutes Show Another Rate Hike Is Likely This Year as Kevin Warsh FOMC Battles Persistent Inflation . Here Why That Signal Matters for Stocks and Bonds Heading Into Year - End .
Minutes released on October 7 show that Kevin Warsh and other FOMC members expect another rate hike in 2026 to fight persistent inflation, with meetings on October 28 and December 9 as key decision points. The September CPI rose 3.7% year over year, and after its September hike, the Fed may lift rates by another 0.25% or 0.5% by year-end. Higher rates typically weigh on stocks through higher borrowing costs, but Vanguard research suggests rates may need to rise at least 1 percentage point before stock markets suffer significant negative effects. The article recalls that in 2022, when the Fed hiked aggressively, the S&P 500 fell about 19% and the Nasdaq-100 fell about 33%. Since bond prices fall when yields rise, bonds may look more attractive than they have in recent years.
- Is Fed Chair Kevin Warsh About To Pop CoreWeave Bubble ?
CoreWeave (CRWV) shares fell 24% over the past week to their lowest level since shortly after its IPO, after venture capitalist Chamath Palihapitiya posted a chart showing its debt yields had risen as high as 15%. The neocloud operator borrows to buy GPUs and rents out their computing power, a model that drove second-quarter revenue up 112% to $2.58 billion. However, it posted a $626 million net loss, largely due to $640 million in interest expense, and negative free cash flow of $10.5 billion in the first half of the year. Fed Chair Kevin Warsh, who took over in May, aims to bring inflation back to the 2% target, including through rate hikes that have pushed Treasury yields higher. Since most of CoreWeave's debt is floating-rate and it has $10.6 billion due by the end of next year, rising rates pose a refinancing test, and its November 11 earnings report is seen as pivotal.
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Latest news
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- Morning Minute: Robinhood Misses, But Crypto Beats and Robinhood Chain Soars
Robinhood posted record revenue of $1.42 billion and EPS of $0.51, both slightly below expectations, while crypto revenue of $120 million beat forecasts, rising 20% from the prior quarter though still 55% below a year earlier. Trading volume reached $50 billion, while event contracts revenue rose to $173 million on a record 16.4 billion contracts traded. Robinhood Chain, launched July 1, generated more 30-day rolling fees than Ethereum or Base by late August, prompting management to say it will ramp up investment, and leading tokens in its ecosystem rose 20-50%. Across the market, major cryptocurrencies gained 2-4% ahead of the FOMC meeting with BTC at $81.3k, while bitcoin ETFs drew $176 million in net inflows.
- Foreign Investors Keep Selling FPT Shares, Still Holding Over 455 Million Shares
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