Fed Decision Today, WestCap Founder Warns of AI Financing Risks
By Jacqueline Policastro | Quincy News Correspondent
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Washington (Quincy News) — Market Recap: U.S. stocks finished higher Tuesday as AI and chip shares regained momentum. The Dow edged up less than 0.1%, the S&P 500 rose 0.6% and the Nasdaq gained 1.2%.
Technology led the market after fresh interest in Anthropic’s initial public offering and stronger orders for computers and related equipment reinforced expectations that AI spending remains strong. Energy stocks declined as oil prices pulled back.
Oil prices fell Tuesday, with U.S. crude settling down 1.8% at $99.90 a barrel and Brent declining 1.7% to $113.88, as diplomatic talks in the Middle East eased some supply concerns. Prices remain near six-month highs. The national average for regular gasoline was about $4.27 a gallon Tuesday, according to AAA, and diesel was about $6.35.
Today’s Focus: The Federal Reserve is widely expected to leave its benchmark interest rate unchanged at 3.75% to 4% Wednesday, one meeting after raising rates by a quarter percentage point. Economists expect a hold but forecast another increase in December. The Fed releases its decision at 2 p.m. ET, followed by Chair Kevin Warsh’s press conference at 2:30 p.m.
For consumers, a hold means no additional increase Wednesday, but also little immediate relief from high borrowing costs. Many credit-card APRs are variable and move with underlying benchmark rates, while auto loans and other forms of consumer credit remain sensitive to broader financial conditions.
Exclusive Interview: High Rates Could Slow AI’s Trillion-Dollar Buildout
High borrowing costs are “one of the largest threats to the AI buildout,” WestCap founder Laurence Tosi told Quincy News in an exclusive interview Tuesday.
Tosi, a former chief financial officer of Airbnb and Blackstone, now leads WestCap, which has $6 billion in assets under management and 38 portfolio companies.
“The underlying reasons for high rates are very stubborn at the moment,” Tosi said, pointing to energy and cost-of-living pressures.
He warned that the strain reaches across an AI expansion that depends on enormous amounts of borrowed capital.
“Already spreads are widening across the AI trade,” Tosi said, citing “an unusual amount of correlated systemic risk” among the companies, lenders and infrastructure projects that need access to markets to finance the buildout.
Because many parts of the industry rely on the same pools of capital, higher borrowing costs can hit several parts of the AI economy at once. Wider credit spreads raise the cost of financing data centers, chips and power projects.
Tosi said even a modest rate increase can slow how quickly “trillions of dollars” in forward commitments are deployed.
Tosi said the problems extend beyond monetary policy, pointing to the federal deficit, government spending and overseas conflicts.
“The problem is, the issues we’re dealing with are intractable,” he said. “We have to solve these problems.”
ON THE SCHEDULE FOR WEDNESDAY, OCTOBER 28, 2026
-2 p.m. ET – Federal Reserve interest-rate decision
-2:30 p.m. ET – Fed Chair Kevin Warsh’s press conference
-After the market closes – Microsoft and Alphabet earnings
-Thursday, before the market opens – Eli Lilly earnings
-Thursday, 8:30 a.m. ET – Third-quarter GDP advance estimate; September personal income and spending, including PCE inflation; and weekly initial jobless claims
-Thursday, after the market closes – Amazon and Intel earnings
-Friday, before the market opens – ExxonMobil and Chevron earnings
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