Fed's Musalem: The Federal Reserve will need to raise interest rates again "soon"

Beating AI News Flash: According to the Financial Times, citing sources familiar with the matter, Blackstone has informed investors in Anthropic’s latest $63 billion chip financing deal that the AI firm may not immediately obtain an investment-grade credit rating after its IPO, and is expected to receive a high-grade non-investment-grade (junk) rating. This contradicts Blackstone’s earlier guidance that Anthropic would secure an investment-grade rating by the end of the year. The development could limit Anthropic’s financing options, as many insurance and pension funds are barred from making large investments in junk-rated borrowers. Anthropic may need to continue relying on high-credit-rating providers to support its financing. Its prospectus shows the company plans to invest over $800 billion in building computing infrastructure by 2045. Securing an investment-grade credit rating is critical to meeting these targets, as it would enable Anthropic to borrow at lower interest rates to fund its AI infrastructure projects. The group holds more than $112 billion in cash and equivalents, and investors expect it to raise an additional roughly $100 billion in its IPO. In the "Project North Star" financing, over $42 billion in senior loans are guaranteed by Broadcom. The $18 billion subordinated debt has received a BB+ rating from KBRA with a positive outlook, and a BB rating from Morningstar DBRS. A Blackstone fund has invested $9 billion in this tranche, with a yield exceeding 10%. The three major rating agencies—Fitch, Moody’s, and S&P—have not yet formally assigned a credit rating to Anthropic.

According to data from the BIT Stock Platform, US stock losses widened: the Nasdaq Composite Index fell 3%, the Nasdaq 100 Index dropped 3.55%, the S&P 500 Index declined nearly 2%, the CBOE Volatility Index (VIX) surged 21%, and the Philadelphia Semiconductor Index slid more than 8%.

Tether released its third-quarter 2026 financial report, posting a net operating profit of $1.5 billion, roughly flat with the previous quarter. Cumulative net operating profit for the first three quarters reached $4.5 billion, with its main revenue sources remaining U.S. short-term Treasury bonds and reverse repurchase agreements. As of September 30, Tether’s excess reserves rose to approximately $7.95 billion, nearly doubling from $4.1 billion at the end of Q2, an increase of about $3.8 billion. Total reserve assets at the end of the quarter stood at around $191.5 billion, with direct and indirect holdings of U.S. short-term Treasury bonds totaling $132.4 billion, and most reserves allocated to highly liquid, short-dated instruments. Tether noted that the total issuance of USDT remained broadly stable at $184 billion in the first three quarters of 2026. CEO Paolo Ardoino stated that the company’s reserve strategy aims to ensure liquidity to meet redemption demands during periods of market and financial system stress, while enhancing financial strength through excess reserves.

San Francisco Fed President Mary Daly said Friday that artificial intelligence (AI) not only affects long-term economic prospects but is also closely tied to the Federal Reserve’s medium- and short-term monetary policy decisions. Daly noted that the Fed needs to understand how technological advances impact U.S. economic growth, productivity, and the labor market to assess its dual mandate goals: inflation, price stability, and maximum employment.

CZ responded in a post to discussions about the scale of Binance’s hack and its impact on Bitcoin (BTC) prices, noting that the $6.3 billion theft is the largest in U.S. dollar terms but not by BTC quantity. He cited the Mt. Gox incident, which involved 650,000 BTC—more than 5% of Bitcoin’s total supply at the time—arguing that market impact cannot be assessed solely by dollar amounts. CZ added that factors like the number of affected users and the share of their assets that were impacted must also be considered. According to him, both the Mt. Gox and FTX incidents affected nearly all users and their assets. He stressed that a more critical question is who will ultimately bear the losses, whether the platform can fully cover them, and avoiding passing the burden to users. CZ stated that the event remains a major disaster for the crypto industry, Binance, and himself, but that the exchange can weather the shock. He emphasized: “The most important thing is that we protect users.”

According to CNBC, Michael Selig, chairman of the U.S. Commodity Futures Trading Commission (CFTC), said in an interview while discussing the Binance hack incident that he hopes to provide a federal-level option for such trading platforms to register with the CFTC.