The Federal Reserve is expected to leave interest rates unchanged at its October 27-28 meeting, with inflation still above its 2% target and oil trading above $100. According to the Kobeissi Letter, rates remaining 150 basis points above the Congressional Budget Office’s forecast through 2036 could increase cumulative US deficits by roughly $6 trillion, raise public debt to 133% of GDP and push the annual deficit to 8.8% of GDP. Governor Christopher Waller said further rate hikes would probably be necessary if the economy develops as expected, while Chair Kevin Warsh declined to commit to a specific move. For bitcoin, a pause accompanied by less hawkish language could support risk appetite, whereas a surprise hike would tighten liquidity and weigh on speculative assets.
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