Weekly Market Commentary: September 14 – 18, 2026

The Fed Hiked.  Now What?

For the First Time in Over Three Years, the Fed Raised Rates – and Signaled It Is Not Done

This week, the Federal Reserve did what markets had been anticipating for months: it raised interest rates.

On Wednesday, September 16, the Federal Open Market Committee voted unanimously – 12 to 0 – to raise the federal funds rate by 25 basis points, bringing the target range to 3.75% to 4.00%. It was the Fed’s first rate increase since July 2023, ending a multi-year pause that had kept rates on hold even as inflation remained stubbornly above the central bank’s 2% target.

The decision was not a surprise. Before the announcement, futures markets had priced in better than a 90% probability of a hike. What mattered to investors was not the hike itself, but what came with it.

What We Observed This Week

We observed a market that absorbed a significant policy shift and, by week’s end, had largely processed it.

In the hours before Wednesday’s announcement, equity markets were under pressure, as they often are heading into high-stakes Fed decisions. The hike, when confirmed, briefly sent stocks and bonds lower. But what followed in the press conference – Fed Chair Kevin Warsh’s comments and the updated Summary of Economic Projections – carried the bigger message.

Warsh made clear that the committee viewed inflation as still too elevated. “Inflation is too high and has persisted for too long,” he said. “We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed.” The committee updated its projections for headline and core personal consumption expenditure inflation in 2026 to 3.7% and 3.4%, respectively – and indicated it did not expect inflation to return to the 2% target until 2029.

Critically, 16 of 18 FOMC participants projected at least one additional rate increase later in 2026. That signal – that the September hike was not the last – gave markets something concrete to reckon with.

Despite the initial reaction, equity markets recovered through Thursday and Friday. Falling oil prices on Friday – with crude retreating toward $100 per barrel – eased some inflation concern, while technology stocks led a modest rebound. By Friday’s close, the S&P 500 ended the week nearly flat (-0.1%), the Nasdaq posted a weekly gain of +0.7% (the only major index to do so), and the Dow Jones fell -1.7%.

Bond markets reflected the rate environment directly. The 10-year Treasury yield settled at 5.01% by Friday – meaningfully higher than earlier in the year and a level that changes the calculus for fixed income allocation decisions.

What We Are Watching

We are watching the path of inflation and the Fed’s next move closely. With the dot plot now pointing to a possible additional hike before year-end, upcoming data on consumer prices, producer prices, and the labor market will take on heightened importance. We are also watching how financial markets continue to process a 4% federal funds rate – a level not seen since before the global financial crisis era – and what that means for valuations, credit conditions, and long-term planning.

For long-term investors, this week was a reminder that Fed decisions are not endpoints. They are waypoints. The policy direction matters more than any single meeting outcome, and navigating that direction with a sound financial plan is what separates reactive investing from purposeful wealth management.

Disclaimer: This content is for educational purposes only and does not constitute personalized investment advice or a recommendation to buy or sell any security. The information provided reflects general market commentary based on publicly available information and is not tailored to the financial situation of any individual. Investing involves risk, including the possible loss of principal. Past market performance is not indicative of future results. Guardant Wealth Advisors, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training.