🔥 The 25bp hike was the easy part — the path is the real risk.

The Fed delivered the expected 25bp move, but the market quickly focused on what comes next. The latest projections point to at least one more hike this year, while Treasury yields pushed toward/above 5%. (Reuters)

That makes the “already priced in” argument only partly convincing. Goldman, JPMorgan and Morgan Stanley were right that the September hike itself was well anticipated — but pricing a hike is very different from pricing a higher-for-longer path. (Reuters)

📉 For equities, the pressure point isn’t simply +25bp. It’s the combination of oil >$100 + sticky inflation + rising yields + another potential hike. That raises the discount rate on growth stocks and leaves less room for valuation expansion.

💡 But there’s an important counterweight: earnings and economic growth remain resilient. So this doesn’t automatically invalidate the equity rally — it shifts the market toward earnings-driven performance rather than multiple expansion.

My takeaway: don’t trade the headline hike; trade the rate path. If yields keep climbing, tech/momentum can remain volatile. If yields stabilize, strong earnings can absorb the tightening surprisingly well.

The next battle is no longer “Will they hike?” — it’s “How many more?” 👀