The Fed Hiked, Unanimously, and Pencilled In More. The Market Shrugged. Here Is Why That Is the Bullish Read.

The Federal Reserve raised the funds rate 25 basis points to 3.75% to 4.00% on Wednesday, its first hike since July 2023, on a 12 to 0 vote. The new dot plot puts the end-2026 median at 4.1%, and sixteen of eighteen officials see at least one more hike this year. Chair Warsh said inflation "is too high and has been for too long," described the move as removing "a dose of accommodation," and again declined to give forward guidance. The 10-year hit 5.04% on Tuesday, its highest since 2007, and closed the week at 5.00%.

The equity market's response was a shrug. The S&P 500 ended at 7,650, down 0.1% on the week. The Nasdaq gained 0.7%. Thursday was the best day in six weeks, with the semiconductor index up 3.1% after Intel's chief executive said memory demand is not slowing and prices will keep rising, which sent Micron up 5%. Robinhood rose 9% on Friday on a wave of price-target increases. Retail sales for August came in at +1.2%, the control group's strongest since 2024. Brent eased to $103.87 as the Saudi pipeline moved toward restart. Roughly $7 trillion of options expired on Friday without incident.

Scorecard: September 14

• Hike 25 bp, vote not unanimous. Half right. The hike came; the vote was 12 to 0. I expected at least one dove to object. None did, which is the most hawkish detail of the week and the one the market handled best.
• End-2026 median dot at or above 4.1%. Right, at exactly 4.1%, with 2027 also at 4.1%.
• 10-year prints above 5.00% on the decision. Right, and early: 5.04% on Tuesday, 5.02% on Fed day.
• S&P support at 7,500 holds. Right. The low close was 7,552 on Wednesday.
• Retail sales above +0.5%. Right. +1.2%.
• Bitcoin holds $72,000 through the CLARITY vote and the hike. Right. The bill failed cloture 50 to 49 on Tuesday, spot ETFs saw their largest one-day outflow since June, and Bitcoin still bottomed near $75,900 and closed the week around $78,000.
• Brent below $105 by Friday. Right. $103.87.

Six of seven, with the miss being the vote count. The one call I would flag for readers is the chip one: the playbook said buy a gap lower on the slowdown essay because nobody had cut a capex number. Nvidia fell 3.4% on Monday and closed the week at $222, above where it started. That trade worked in four days.

Why a Market That Shrugs at 5% Is Bullish

A year ago a 5% 10-year was the number that was supposed to break equities. It arrived on Tuesday and the S&P lost 0.45%. The reason is in Warsh's own explanation of the long end: he named economic strength, competition for capital from hyperscaler capex, and geopolitics as the three drivers. None of those is a recession signal. Retail sales at +1.2% and a GDP projection revised up to 2.3% describe an economy that is absorbing a hike, not buckling under one.

The unanimous vote matters for the same reason. The doves conceded because the data left them nothing to argue with. That removes the scenario I was most worried about in June, a divided committee that hikes late and hard. A committee that hikes early and together can stop early. The dots say one more this year and then a plateau at 4.1% through 2027, which is a ceiling the market can price. The bond market did exactly that: yields fell on Thursday, not on Fed day.

The cost of this is duration. Lennar's quarter on Wednesday showed what a 5% 10-year does to housing: deliveries down 3%, margins down 170 basis points, new orders down 9%, full-year targets cut. That is the K-shaped economy from August 17 in one earnings report. The consumer with assets spent 1.2% more in August. The consumer who needs a mortgage did not.

The Memory Trade Just Got Its Catalyst

Micron reports its fiscal fourth quarter on Wednesday, September 30. The guide is $50 billion of revenue and $31 of earnings per share, numbers that would have been a typo eighteen months ago. Everything in the last two weeks argues the print clears them: Goldman called the end of the summer downtrend on September 9 with DRAM contract pricing seen up 50% and NAND up 60% quarter over quarter; Apple raised iPhone prices by $100 to $500 explicitly on memory costs; Intel's chief executive said on Thursday that demand is not slowing.

The question is not the quarter. It is the November guide and the fiscal 2027 capex plan. Samsung and SK Hynix have already said the shortage runs to 2028. If Micron guides above $55 billion and commits to disciplined capacity additions, the July sell-off, which took the stock down 29% in a month on the fear of a supply wave, will look like the buying opportunity the August 3 post said it was. The stock closed Friday near $1,050. The risk, as always since June, is a great print sold into a nervous tape, and the tape is calmer than it has been all summer.

This Week

• Fed speakers. The first post-meeting remarks come from regional presidents on Tuesday. Expect the hawks to keep October live. The market will care more about whether anyone pushes back.
• Friday: August PCE. Warsh estimated headline near 3.6% and core near 3.2% at the press conference. A print at or above those numbers is already in the dots. A print below them is the first piece of good inflation news since spring and would rally the long end.
• General Mills on Wednesday, Nike late in the week. Two reads on the consumer with a grocery bill and a sneaker budget rather than a portfolio.
• Anthropic's IPO. October is the target, on Nasdaq, near $965 billion. As the roadshow approaches, watch whether AI capital rotates out of listed names to make room, the pattern SpaceX set in June.
• Bitcoin. It survived its worst-case week. The bill is dead for the year, so the next catalyst is flows. Three consecutive days of net ETF inflows would confirm the September 16 low; without them, $75,000 gets retested. The $150,000 call stands and the retirement level remains a weekly close below $55,000.