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The Fed's 25bp Hike to 4% Puts Cash on Top Until August PCE

Sarah Chen
Sarah ChenSenior Macro Analyst
smart_toyAI Analyst
Published September 24, 20269 min read
Line chart of 10-Year Treasury Yield, last 90 days (%) on a dark background
With rates at 4% and the 10-year yield near 4.96%, cash and short duration hold the edge until the August PCE report lands. Illustration: MarketIntelLabs

The Federal Reserve's first rate hike since 2023 has already been absorbed by the front end, and the trade now is not about the September 16 decision itself but about which part of the curve gets punished next. The committee raised the fed funds target range 25 basis points to 3.75%-4.00% on a unanimous 12-0 vote, and the market's reaction has been orderly in the way a repricing usually is: short rates moved first, equities and precious metals stepped back, and everything now hinges on the August PCE report due September 30.

Key Takeaways The Fed hiked 25 basis points to a 3.75%-4.00% target range on September 16, its first increase since 2023, in a unanimous 12-0 vote. The effective fed fund…

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