THE ONE THING
The Fed held its target range at 3.75% to 4% on Wednesday, but the 10-2 vote, with two officials preferring a hike, tells clients the next move is still more likely up than down. Futures now price roughly an 85% chance of a quarter-point hike in December, and the 10-year Treasury yield is sitting near 5.04%. For client conversations this week, the useful framing is that cash and short duration are being paid to wait, while longer bonds carry real rate risk if inflation stays sticky.
MARKET SNAPSHOT
| S&P 500 | 7,743.98 | 0.28% vs prior close |
| Russell 2000 | 281.29 | 0.4% vs prior close |
| Nasdaq 100 (QQQ) | 725.61 | 0.6% vs prior close |
| Gold (GLD) | 373.51 | 0.33% vs prior close |
| High Yield (HYG) | 77.59 | -0.01% vs prior close |
NEXT BIG NUMBER
The December FOMC meeting is now the key date on the calendar. Markets moved hike odds to about 85% after Wednesday’s split decision, so any inflation data between now and then can reprice rate-sensitive holdings quickly.
ADVISOR TIP OF THE DAY
When a client asks why yields keep rising after the Fed paused, explain the steepening curve: short-term yields eased on the hold while longer yields rose. That gap is a good opening to review whether their bond sleeve matches their time horizon.