"The Most Performative Interest Rate Hike Ever"

Today's Post - https://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 TheBahnsenGroup.com