WS #16475
The Federal Reserve's 10-2 decision to hold rates was overshadowed by hawkish dissent, signaling that the central bank is not done tightening. With inflation remaining elevated and economic activity strong, markets are now pricing in a 90% chance of a December hike. This shift from a 'pause' to a 'hike' narrative is pressuring growth stocks and financials, as higher rates extend the cost of capital and dampen future earnings multiples.
Fed Hawkish Pivot & Rate Hike Odds
The Federal Reserve's 10-2 decision to hold rates was overshadowed by hawkish dissent, signaling that the central bank is not done tightening. With inflation remaining elevated and economic activity strong, markets are now pricing in a 90% chance of a December hike. This shift from a 'pause' to a 'hike' narrative is pressuring growth stocks and financials, as higher rates extend the cost of capital and dampen future earnings multiples.