Bitunix Analyst: Bond Tightening and Election Pressure Interweave — the Fed’s Hike Faces Growth Risk

BlockBeats news, October 27—US policy now faces a multi-way tug between inflation, economic growth, and election pressure. A Reuters/Ipsos poll shows Trump』s approval rating back to 32%, while Democrats still lead the generic Congressional vote by 11 percentage points—and 73% of respondents say cost of living is moving in the wrong direction. Trump has proposed a $1 million reward for reporting election fraud, though the funding source and execution remain unclear. The election is no longer just a contest for Congressional seats—it is also about cost-of-living, government trust, and policy commitments.

Trade policy is equally entangled with the election and corporate costs. The US and Canada are negotiating to lower steel and auto tariffs—the US currently imposes up to 50% on Canadian steel and 25% on autos. Even if progress is reached before voting, it may only cover part of the goods basket, with Washington still demanding further Canadian concessions. If tariffs persist, manufacturing costs will rise; a partial easing could relieve some supply-chain pressure, but it would not necessarily mean bilateral trade frictions have been fully resolved.

The monetary policy debate centers on whether another hike is still necessary. Moody』s chief economist Mark Zandi argues the Fed should hold this week—pointing out that the 10-year Treasury yield is already hovering around 5%, mortgage rates remain above 7%, and financial conditions have already tightened. Conflict-driven energy costs may indeed extend inflation pressure, but a hike cannot add oil supply—it could instead further compress household purchasing power and corporate financing space.

Market focus is therefore not just whether the Fed hikes—it is whether the energy supply shock and high rates will form a dual drag. Should oil prices stay elevated, inflation may remain sticky. Should bond-market tightening begin to depress demand, growth risk will rise. Ahead, markets will watch how the Fed weighs these two forces, and whether US-Canada tariff talks can reduce corporate costs—because the policy trade-off will directly shape the pricing of the dollar, Treasury yields, and risk assets.