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Fed Decision Looms as AI Cloud Warning Spreads

· Fact-checked before it aired. Unconfirmed claims from this segment are not shown.

ING's FX strategist said EUR/USD's case for a sustained recovery "remains weak" because of French budget stress and high energy prices, even after Moody's left France's Aa3 rating unchanged with a negative outlook.

Markets widely expect the Fed to hold rates this week; the WSJ live blog notes both the Fed and ECB are expected to keep rates on hold "before likely hikes in coming months." The Goldman-specific call and Kalshi's 93% figure fit that consensus but weren't independently confirmed in our sources.

Fact-check

VERIFIED TRUE

ING's FX strategist said EUR/USD's case for a sustained recovery "remains weak" because of French budget stress and high energy prices, even after Moody's left France's Aa3 rating unchanged with a negative outlook.

ING WARNS EURO COULD FALL FURTHER ON FRENCH DEBT CONCERNS ING says the euro remains vulnerable despite Moody's maintaining France's Aa3 credit rating. With little progress expected on France's budget and energy prices elevated, pressure on the currency could persist. 🔸

Original post · *Walter Bloomberg (@DeItaone)

[fxstreet.com](https://www.fxstreet.com/news/euro-french-fiscal-risks-limit-recovery-against-us-dollar-ing-202610200717) NAMES: ING = Dutch bank ING Group; Mood

VERIFIED TRUE

Markets widely expect the Fed to hold rates this week; the WSJ live blog notes both the Fed and ECB are expected to keep rates on hold "before likely hikes in coming months." The Goldman-specific call and Kalshi's 93% figure fit that consensus but weren't independently confirmed in our sources.

OCTOBER HOLD PRICED IN. WALL STREET EYES DECEMBER HIKE. Goldman Sachs expects the Fed to hold rates this week before raising them 25 basis points in December. Kalshi traders price a 93% chance of an October hold, versus just 6% for a hike. The debate has shifted from October http

Original post · *Walter Bloomberg (@DeItaone)

[wsj.com](https://www.wsj.com/finance/jgb-yields-higher-amid-concerns-about-higher-energy-prices-897f5458) NAMES: Fed = U.S. Federal Reserve; Goldman Sachs = in

Sources

What the hosts said

SGood morning, it's Monday. The Fed decision is this week, and markets have already made up their minds.
EWalter Bloomberg posted on X that Goldman Sachs expects the Fed to hold rates this week, then hike by a quarter point in December.
SThe October hold is basically priced in. Prediction markets put it at 93 percent.
EKalshi traders see only a 6 percent chance of a hike this week. It's not close.
SSo the debate has shifted. Not 'will they?' but 'when will they?'
EOil prices are climbing, and inflation is still sticky. A December hike could get messy.
SMessy for who? If inflation doesn't cool, waiting is worse.
EBut if they hike into an oil shock, they risk choking growth.
SThat's the tension. The Fed's got no clean move here.
ENo easy path. Goldman's December call has real risk, and they know it.
SIf oil keeps rising, the Fed might just stay on hold into next year.
EThat would be a miss for anyone betting on December.
SMeanwhile, the euro is under pressure. ING warns it could fall further on French debt concerns.
EMoody's kept France's Aa3 rating, but the outlook is still negative.
SING's strategist says a sustained recovery in the euro remains weak. Budget progress isn't happening.
EAnd energy prices stay elevated, which makes it worse.
SSo Europe has a weak currency, high energy costs, and no fiscal room.
EThat's not a recovery. That's a slow squeeze.
SAnd it keeps the dollar strong, which matters for global trade.
EFor Americans, a strong dollar makes imports cheaper, but it hurts exporters.
SHere's a shift worth noting: HSBC reportedly cut global equities to neutral from max overweight.
EThe same report says they trimmed gold and moved oil to outright overweight.
SThat's a risk-off tilt. They're not bearish, but they're taking chips off the table.
EIt fits the oil story. If energy keeps rising, oil names get a bid.
SAnd gold? They were overweight, now neutral. That's a call that rates stay higher.
ENot confirmed by HSBC officially yet, but it's the talk this morning.
SIf true, it's a notable shift from one of Europe's biggest banks.
SNow this one is a big claim: Elon Musk is warning about a wave of failures in AI cloud companies.
EAccording to a post from Walter Bloomberg on X, Musk says debt markets have shut off financing for companies without real revenue.
SHe's calling them 'neocloud' — cloud providers built around AI data centers. Says 200-plus could fail or consolidate.
EThat's not verified, but the logic is sound. AI infrastructure is everywhere, and not all of it has customers.
SSome are just renting GPUs and hoping for demand. If rates stay high, they can't refinance.
EThe ones with real revenue survive. The speculative ones get bought or shut down.
SThat's a healthy cleanup for the industry. Less vapor, more substance.
EUnless you're holding their debt. Then it's just losses.
SAnd for the AI trade broadly, it's a reminder that not every data center gets a happy ending.
SAnd last week's market split was telling. Small companies outperformed the big tech giants.
EThe S&P and Nasdaq slipped, but small caps had a clear winning week. Money rotated.
SBig tech had been carrying the market; now investors are hunting for value.
EIt's the AI returns question again. Can megacaps keep growing?
SIf not, small caps and energy get a longer look. That's the setup this week.
EA lot hinges on Big Tech earnings and the Fed. This morning sets the tone.
SWe'll be watching every move.

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