🚨 THE FED JUST REOPENED THE RATE-HIKE CYCLE
The Federal Reserve raised interest rates by 25 bps to 3.75%–4.00%—its first hike since 2023
Even more hawkish: policymakers signaled that another hike could come before year-end
The vote was unanimous at 12–0, with Kevin Warsh bringing the entire FOMC behind the decision
JPMorgan’s playbook called this scenario correctly:
A 25 bps hike combined with a signal that the Fed is willing to reverse part of its 2025 easing cycle
Their projected reaction? The S&P 500 could initially gain 0.5%–1%
Why would stocks rally after a rate hike?
Because the market may read this as confidence in economic strength—and because the decision removes uncertainty that traders hate more than tightening itself
But don’t confuse the first move with the final direction
If Treasury yields keep rising, the dollar strengthens and liquidity tightens, risk assets could quickly give back the relief rally
The headline is bullish for volatility—not automatically bullish for markets
Are you trading the first reaction, or waiting for confirmation from yields and the dollar?
#FedRateWatch
The Federal Reserve raised interest rates by 25 bps to 3.75%–4.00%—its first hike since 2023
Even more hawkish: policymakers signaled that another hike could come before year-end
The vote was unanimous at 12–0, with Kevin Warsh bringing the entire FOMC behind the decision
JPMorgan’s playbook called this scenario correctly:
A 25 bps hike combined with a signal that the Fed is willing to reverse part of its 2025 easing cycle
Their projected reaction? The S&P 500 could initially gain 0.5%–1%
Why would stocks rally after a rate hike?
Because the market may read this as confidence in economic strength—and because the decision removes uncertainty that traders hate more than tightening itself
But don’t confuse the first move with the final direction
If Treasury yields keep rising, the dollar strengthens and liquidity tightens, risk assets could quickly give back the relief rally
The headline is bullish for volatility—not automatically bullish for markets
Are you trading the first reaction, or waiting for confirmation from yields and the dollar?
#FedRateWatch
