WS #16481
Chair Warsh's press conference marked a decisive hawkish pivot, warning that interest rates affect 'almost everything' and flagging widening credit spreads and gaps in risk assets. This has dampened the previous 'AI-is-rate-immune' narrative, pressuring high-multiple growth stocks and financials that rely on cheap leverage. The market is now pricing in a higher probability of a December rate hike, shifting the macro backdrop from accommodative to restrictive.
Fed Hawkish Pivot & Credit Risks
Chair Warsh's press conference marked a decisive hawkish pivot, warning that interest rates affect 'almost everything' and flagging widening credit spreads and gaps in risk assets. This has dampened the previous 'AI-is-rate-immune' narrative, pressuring high-multiple growth stocks and financials that rely on cheap leverage. The market is now pricing in a higher probability of a December rate hike, shifting the macro backdrop from accommodative to restrictive.