Source: Graham Stephan
Fed rate pause midterms: What You Need to Know
THE TL;DW
- The Fed held its benchmark rate at 3.75%-4.00% in a 10-2 vote on October 28, its final decision before the midterms.
- September inflation climbed to 3.7% with producer prices rising even faster, pushing Treasury yields higher just as investors hoped for relief.
- Graham argues the S&P 500’s gains mask weakness underneath, with more than 4 in 10 index stocks underperforming this year.
The Jupiter Take
The Fed rate pause midterms decision lands at a politically sensitive moment, with officials insisting the hold has nothing to do with the election. Graham Stephan uses 75 years of midterm data to argue the headline index is hiding real cracks in market breadth.
Context
Graham Stephan timed this video to October 28’s FOMC meeting, where the Fed voted 10-2 to hold rates steady at 3.75%-4.00%, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a quarter-point hike. It’s notable as the first rate decision under new Fed Chair Kevin Warsh, who has publicly insisted the pause has nothing to do with the upcoming midterms even as it’s widely reported as the Fed’s last move before voters head to the polls.
