#Fed Hike: Is the Second Hike Already Priced In? 👀

D1ane
09-17 14:02

The Fed delivered the expected 25bp hike to 3.75%–4.00%.

But stocks didn’t celebrate.

QQQ barely moved, while SPY and the S&P 500 finished lower.

To me, the bigger story isn’t the hike we got — it’s the hike the market is now thinking about.

The market had largely priced in one move. The Fed’s projections keep another hike firmly in the conversation, while inflation is still being described as too persistent.

That creates an interesting battle:

🟢 Strong earnings + economic growth

🔴 Higher-for-longer rates

🟢 AI/tech investment remains strong

🔴 Valuations face pressure from yields

So the question is:

Did the market already absorb the second hike, or is another repricing coming?

I’m watching Treasury yields + QQQ more closely than the Fed headline from here.

If yields stabilize, tech could absorb the news.

If yields keep climbing, the pressure on high-growth stocks could return quickly.

Buy the dip, hold, or wait for confirmation? 👇

Fed Hikes for First Time in Three Years — Why No Market Relief?
The Fed raised 25bp to 3.75%–4.00% at 2 a.m. Beijing Wednesday, its first hike since July 2023. The result was in line and stocks still could not rally: QQQ +0.03% to $704.72, SPY −0.44% to $754.05, S&P 500 −0.45% to 7,551.81, gold +1.10%. The weight was the dot plot — 16 of 19 officials want another hike this year — and Chair Warsh saying inflation is too high, too persistent, with no clear improvement in the summer data. Morgan Stanley, JPMorgan and Goldman are still constructive on earnings and growth. But the market priced one hike; the dots say two. Has the market accepted the second one?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • peepzy
    09-17 14:33
    peepzy
    Not fully priced in yet. Higher-for-longer hits long-duration tech through discount rates first, so QQQ probably still trades off the 10Y more than the headline here
Leave a comment
1