Edition · Wed 28 Oct 2026
Economics Desk
Warsh Holds the Line: The Fed Pauses With the 10-Year Above 5%
The Fed is expected to hold rates steady under Chair Kevin Warsh despite elevated inflation, as Treasury yields hold near 5% and oil prices climb.
Not investment advice: this article is for information only.
Chanan Zevin - Chief Editor and Head of Desks
Published
Federal Reserve weighs inflation against steady yields
On Wednesday, the Federal Reserve approached its scheduled 2 p.m. ET policy announcement with expectations that policymakers would hold interest rates steady under Chairman Kevin Warsh despite elevated inflation readings.
Federal Reserve weighs inflation against steady yields
Why it matters: A pause from the central bank while benchmark borrowing costs remain elevated tests corporate balance sheets and market liquidity. When monetary authorities choose not to adjust rates despite sustained price pressures, businesses and consumers must navigate prolonged financing burdens without immediate intervention from policymakers.
Federal Reserve weighs inflation against steady yields
The yield on 10-year Treasuries stood little changed at 4.99%, hovering around 5%, while Germany's 10-year yield was little changed at 3.35% and Britain's 10-year yield declined two basis points to 5.32%. Chairman Kevin Warsh faces pressure to explain why rate setters paused after voting unanimously last month to raise rates to counter inflation, while Kathleen Brooks, research director at XTB, said that investors face risk as borrowing costs could increase by as much as 75 basis points over the next year.
Tech earnings surge on semiconductor demand
In equity futures trading ahead of the policy verdict, contracts on the S&P 500 rose 0.2% and Nasdaq-100 futures gained 0.3%, while Dow Jones Industrial Average futures traded flat. S&P 500 futures rose 0.2% as of 8:35 a.m. New York time and Nasdaq 100 futures rose 0.4%, supported by strong corporate results across the semiconductor industry.
Tech earnings surge on semiconductor demand
Chipmakers rallied after South Korean memory manufacturer SK Hynix reported that profit grew 632% year over year alongside a 328% increase in quarterly revenue. Following the earnings report, US-listed shares of SK Hynix rose 8% in premarket trading, domestic South Korean shares jumped 10%, Samsung Electronics gained 5%, and Micron rose 2%.
Tech earnings surge on semiconductor demand
Technology sentiment also drew strength from deal activity after Broadcom negotiated a $63 billion financing arrangement with a banking consortium to fund artificial intelligence compute capacity. Ahead of evening earnings reports, Microsoft offered buyouts to up to 60,000 employees as it sought to adjust corporate structure.
Energy spikes and corporate shifts unsettle broader markets
Commodity markets witnessed substantial moves as Brent crude briefly reached $115 a barrel after reports that the United States could resume military strikes on Iran following midterm elections. In parallel trading, West Texas Intermediate crude rose 1.9% to $101.78 a barrel, while spot gold fell 0.1% to $4,054.79 an ounce.
Energy spikes and corporate shifts unsettle broader markets
Outside the energy sector, Nelson Peltz's Trian Partners made an offer of $1.4 billion to acquire Wendy's. Wendy's shares rose 15% in premarket action on the takeover bid, while A 16% advance for the fast-food chain as investors evaluated analyst Andy Barish's projection of potential franchise closures over the next 6-12 months.
Energy spikes and corporate shifts unsettle broader markets
European equities reflected varied corporate updates, with the Stoxx 600 falling 0.2% as energy costs pressured equities. Across European exchanges, ASM International rose as much as 5%, Deutsche Bank climbed more than 3%, Standard Chartered gained 3%, Banco Santander dropped 3%, GSK fell 5%, and Adyen tumbled 13%, while Robinhood shares fell 8% in US premarket trading after quarterly profits missed expectations.
Energy spikes and corporate shifts unsettle broader markets
Currency and digital asset prices showed muted movement ahead of the monetary policy statement, with the British pound falling 0.1% to $1.3290 and the euro holding little changed at $1.1134. Separately, the Japanese yen stood at 157.92 per dollar, while bitcoin traded at $80,671.59 and ether dropped 0.3% to $2,335.05.