Sep 17, 2026 · 11 min
Hawkish Fed hike keeps markets and households on edge
Top of the Morning: FOMC reflections & US economy health-check
The episode connects the Fed’s inflation concerns and possible further tightening to market pricing, economic momentum, and rising household borrowing costs.
- 1The FOMC delivered a hawkish hike, signaling persistent inflation concerns and leaving further tightening on the table.
- 2UBS expects one additional rate increase before the Fed pauses as disinflation develops and inflation pressures ease.
- 3Markets reflected the surprise through higher two-year yields, weaker stocks, and a stronger dollar, while long-term bonds moved little.
Don't miss
Andrew Dubinsky explains why higher two-year yields, weaker stocks, and a stronger dollar signaled a hawkish market surprise.
The brief
Dan Cassidy introduces Andrew Dubinsky to examine a hawkish FOMC hike, the Fed’s inflation concerns, and what the decision says about monetary policy ahead.
Dubinsky argues that the statement, projections, press conference, and unanimous vote all left room for another increase, despite expectations that inflation will improve.
UBS’s base case calls for one more hike followed by a pause, as tariff and energy effects roll out of year-over-year inflation data.
Markets treated the decision as a hawkish surprise: two-year Treasury yields rose, stocks weakened, and the dollar strengthened, while long-term bonds barely moved.
The conversation closes by weighing robust consumption and investment against labor-market conditions and the growing burden of credit-card and mortgage costs.
Weekly email
State of the Pod, every Monday
The week's most-discussed names and stories from podcasts, with the moments behind them. Free, five minutes, unsubscribe in one click.