"The Most Performative Interest Rate Hike Ever"

Today's Post - bahnsen.co/4j4mxuI

David Bahnsen discusses the Fed’s quarter-point rate hike, arguing it was largely “performative” because markets had already tightened financial conditions and the Fed is now following rather than leading. He notes the fed funds futures market implies an 87% chance of another hike this year and reviews the political speculation around Chairman Kevin Warsh and President Trump, including Trump’s post calling for 1% rates while diverting attention to trade deficits. Bahnsen highlights the unanimous 12–0 vote, the Fed’s focus on price stability amid supply-shock pressures, and the neutral mechanics of paying 3.9% on reserves. He reviews muted bond-market moves, elevated mortgage rates near 7%, and cautions against overreading immediate stock-market reactions, emphasizing earnings, AI, oil, and valuations as bigger drivers than the fed funds rate.

00:00 Welcome and Fed Week

00:44 Why the Fed Matters

02:08 Performative Rate Hike

05:11 Politics and Independence

10:54 Midterms and Next Hike

11:52 Unanimous Vote Rationale

14:34 Bond Market Reaction

17:02 Stocks and Volatility

19:05 Practical Takeaways

21:28 Closing Thoughts

Links mentioned in this episode:
DividendCafe.com (dividendcafe.com)

TheBahnsenGroup.com (thebahnsengroup.com)