Monthly coverage of Fed meeting on ‪@cnbcarabiaTV‬ on October 28th 2026

The Fed held rates yesterday, but its next move is being decided by AI borrowers, the Treasury and the Gulf rather than by the committee itself When the Federal Reserve left its policy rate at 3.75% to 4.00% yesterday, with two members voting for an increase and Chair Warsh insisting that inflation remains too high, it was responding to an economy whose growth now depends to a remarkable degree on a single industry, since investment in AI computing and software accounted for roughly half of the 2.1% expansion recorded in the second quarter. That industry has stopped financing itself from its own cash flow and has turned to the debt markets instead, selling around $200 billion of hyperscaler bonds this year and taking close to a fifth of all investment grade issuance at a time when lenders already demand larger concessions to absorb the supply. It is also competing for the same pool of savings as the US Treasury, which is borrowing at a record pace to refinance a $40 trillion debt and to cover an interest bill that now exceeds the defense budget, and when two borrowers of that size chase the same capital the price of money rises whatever the Fed decides, which is why the 10 year yield sits close to 5% even with policy on hold. The administration's Iran policy adds a layer of pressure that works directly against its own stated goals, becuase the President wants lower interest rates and lower prices for American households, yet reports that Washington has told Gulf allies to prepare for renewed strikes after the midterms pushed Brent to $115.32 at yesterday's close, and higher energy costs feed inflation, lift yields and make it all but impossible for the Fed to ease. Warsh acknowledged as much in his press conference when he noted that oil futures had risen over recent weeks and that he could not ignore it, and his refusal to describe financial conditions as tight shows how little room he believes he has. A negotiated settlement with Tehran would bring oil down quickly and diplomacy is still under way, but as long as AI investment depends on debt and the goverment keeps borrowing at this pace, every flare up in the Gulf will land on a central bank with no capacity left to cushion it, which turns the December meeting into a genuine decision rather than a formality.