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The decision was made by a vote of 10 to 2: Governor Lisa Cook and Cleveland Fed President Beth Hammack insisted on an immediate 0.25 percentage point increase. Six weeks earlier, the committee had made the same decision unanimously.
Bitcoin failed to hold above $81,687 and dropped to $80,297 on the Bitstamp exchange, down about 0.3% over the day. Buyers did not break through the 50-day moving average ahead of the Fed decision and tech earnings reports.
Galaxy Research analyzed the filings of major managers: nine hedge funds and banks cut their positions in U.S. spot Bitcoin ETFs by 68,000 BTC - about $5.4 billion. The reason is not a bet against the market, but that the arbitrage scheme has almost stopped generating income.
Brent added $1.50 (1.32%) and returned to $115.59 per barrel, WTI rose $1.47 to $101.37. The trigger - a statement by Yemeni Houthis that they hit Ras Tanura, the kingdom's largest oil refinery at 550,000 barrels per day, with a ballistic missile. Riyadh has not confirmed the strike.
Today the Fed announces its rate decision at 21:00 MSK, and after the US session closes Microsoft and Alphabet report - the first two of the companies whose AI infrastructure spending drives Nvidia's revenue. Heading into the event, the Nasdaq Composite stood at 26,477.81 points.
The Bank of Canada announces its rate decision midday, the Fed in the evening. USD/CAD is rising for a second day and has already bounced from 1.3970-1.3965, the low since September 16, climbing above 1.4000 - a new weekly high.
Today at 15:30 MSK UK Finance Minister John Healey presents his first annual budget, and at 21:00 MSK the Fed will announce its rate. GBP/USD is already at 1.3300 - the lowest since October 19.
The euro is weakening against all major currencies due to the state of France's public finances and a sell-off in its bond market. The EUR/USD pair is trading around 1.1145 and is falling for a fifth session in a row - on the eve of back-to-back Fed and ECB decisions.
On Monday, October 26, the dollar strengthened against major currencies ahead of the Fed meeting on Wednesday. The yen is the weakest in the basket, the pound slipped from its recent peak of 1.3419 to levels below 1.3350.
Spot gold gained 0.4% to $4,009.87 per ounce by 06:42 Moscow time on Monday. This is a rebound after the worst week since June: over the week the metal lost 4% and closed below the round $4,000 mark for the first time since mid-July.
On October 28 at 21:00 Moscow time, the Fed will announce its rate decision, and the market expects almost no move: the probability of a hike fell from 73% to 9.4%. The main focus will be the wording of the statement and the press conference at 21:30 Moscow time.
Overnight into Thursday, XAU/USD lost about 1% and moved to $4,095 - a one-week low. The reason is unusual: the market expects not a cut but a Fed rate hike in December, and money is leaving the metal that pays no interest.
XAU/USD touched a fresh weekly low: on Tuesday gold closed at $4,122 (-0.43%), and in the Asian session on Wednesday it traded around $4,115 (-0.2%). This is the fourth consecutive day of decline, all because the market expects the Fed to raise rates rather than cut them.
On October 16, silver (XAG/USD) closed the day down 0.77% at $56.86 per ounce. From $60.45 on October 12, the metal has lost $3.59, that is, about 6% in a week.
XAU/USD rose to $4,165 at the start of the Asian session on Friday, October 16, ending a three-day losing streak. The trigger was a weaker dollar and a sharp drop in US Treasury yields
After softer inflation data, the market sharply lowered expectations for a Fed rate hike in October. The probability of such a decision dropped to about 35-37%, whereas at the beginning of the week it exceeded 70%
According to CME FedWatch, market participants estimate the probability of a Fed rate hike at the October 28 meeting at above 70%. The case is historically exceptional: in October before US elections, the Fed has never once raised rates.
