Bonds & Stocks
The plunging value of Bitcoin is piling pressure on the securities Strategy Inc. has been issuing to buy the asset, raising questions about the financing model of the world’s largest crypto treasury firm. Prices across the several preferred stock series sold by the firm have been falling, in line with a slump in Bitcoin’s value, pushing up the yield and raising implied yields. Higher costs will cast a shadow over Strategy’s ability to keep tapping the market for funds to buy Bitcoin and to pay dividends on the stock already issued.
Economy
Federal Reserve Bank of New York President John Williams said he sees room for the US central bank to cut interest rates again in the near term as the labor market softens. Williams said downside risks to employment have increased while upside risks to inflation have eased, and that monetary policy is being modestly restrictive. Investors now see about a 65% probability of a rate cut at the December meeting after Williams' comments, up from around 45% before the speech.
World
Kyiv's biggest European allies have rejected key elements of a US-Russian plan to end the war in Ukraine that includes sweeping concessions to Vladimir Putin. The US has threatened to stop intelligence-sharing and weapons supplies to Ukraine unless Kyiv agrees to the peace plan, which would require Ukraine to hold elections and give up any hope of NATO membership. European leaders have doubts about the status and legitimacy of the plan, characterizing it as tantamount to a capitulation by Ukraine with Russia getting what it wants.