Market Update Preview
Fed Day delivered a hike. Heading in, this was probably the most uncertain rate decision we've had in many years — exactly how Warsh has wanted to present this new, no-forward-guidance Fed. And yet he did precisely what the market had priced: a quarter point, a nod that inflation isn't fully under control, and another hike left on the table. Markets popped, sold off close to a percent, and climbed back overnight to essentially where they started. No damage done.
I've been vocal about the risks into the mid-September tax drain and have had my foot off the gas for a couple of weeks now, waiting for this window to play out. So far it's played out as expected. I walk through what I want to see over the next 24-48 hours before I start re-aggressing, the specific Vol Shift trigger I'm waiting on, and why I think the levels we're near now become the buying opportunity for the next leg into year-end.
The bigger story is what Warsh's willingness to hike means further out. In this framework, higher rates don't break this cycle — they accelerate it. I lay out why a Volcker-style hiking cycle could spiral from here, why oil back above $100 makes that more likely rather than less, and the two things that make this setup genuinely unlike the 1970s or 2000 — both of which have never been tested. Plus the longer-term watch items: the next inflation wave, what margin debt is actually signaling, and an interest-income milestone we haven't seen since 2009. Full breakdown below.
(Note: Below is a full summary of the Market Update Video for 09/16/2026, click here to watch the video update)
