Can the Fed keep rates high without breaking the economy?
The U.S. Federal Reserve is widely expected to leave interest rates unchanged at its October 27‑28 meeting, even as inflation remains stubborn, oil trades well above $100, and borrowing costs climb amid record federal debt and interest expenses.
Analysts at the Kobeissi Letter warn that if rates average 150 basis points above the CBO’s February baseline through 2036, cumulative deficits could rise by roughly $6 trillion, public debt could hit 133% of GDP, and the annual deficit could reach 8.8% of GDP. Even a 50‑basis‑point overshoot could add close to $2 trillion to deficits and push debt to 124% of GDP, a view echoed by the Committee for a Responsible Federal Budget.
Fed Governor Christopher Waller said further hikes would probably be necessary if the economy develops as expected, while Fed Chair Kevin Warsh avoided a commitment. A Reuters poll finds most economists expect a pause in October before a raise in December.
For Bitcoin, a pause with softer forward guidance could ease pressure from high Treasury yields, improve appetite for risk assets and give BTC a needed catalyst. An unexpectedly hawkish signal or surprise hike would likely tighten liquidity and challenge speculative assets.
Which rate path do you think is more likely, and how will Bitcoin respond?
#FederalReserve #InterestRates #Bitcoin #MacroEconomy #Crypto
The U.S. Federal Reserve is widely expected to leave interest rates unchanged at its October 27‑28 meeting, even as inflation remains stubborn, oil trades well above $100, and borrowing costs climb amid record federal debt and interest expenses.
Analysts at the Kobeissi Letter warn that if rates average 150 basis points above the CBO’s February baseline through 2036, cumulative deficits could rise by roughly $6 trillion, public debt could hit 133% of GDP, and the annual deficit could reach 8.8% of GDP. Even a 50‑basis‑point overshoot could add close to $2 trillion to deficits and push debt to 124% of GDP, a view echoed by the Committee for a Responsible Federal Budget.
Fed Governor Christopher Waller said further hikes would probably be necessary if the economy develops as expected, while Fed Chair Kevin Warsh avoided a commitment. A Reuters poll finds most economists expect a pause in October before a raise in December.
For Bitcoin, a pause with softer forward guidance could ease pressure from high Treasury yields, improve appetite for risk assets and give BTC a needed catalyst. An unexpectedly hawkish signal or surprise hike would likely tighten liquidity and challenge speculative assets.
Which rate path do you think is more likely, and how will Bitcoin respond?
#FederalReserve #InterestRates #Bitcoin #MacroEconomy #Crypto
