Equities: JP Morgan says a hold would likely push the S&P 500 down 1.25%–1.75%;
a 25bp hike with no forward guidance would lift the index 0.25%–0.75%. Yardeni
Research expects 2–3 additional hikes ahead, raising volatility.
MacroRiskAdvisors warns a Fed hiking cycle could trigger an 8%–10% S&P drawdown.
Goldman Sachs sees 25–50bp hikes as unlikely to derail corporate capex or market
resilience. UBS says limited tightening and resilient growth leave fundamentals
intact and supports further S&P upside, citing continued AI-led investment
demand. Dollar: OCBC notes oil, higher Treasury yields and weaker risk appetite
support the dollar short term but says further upside requires Fed to preserve
tightening optionality. Scotiabank warns an unexpected hold would materially
weaken the USD; a hike without clear commitment to follow-up tightening could
also weigh. Standard Chartered says a hold may dent the dollar and long-end
yields near term but won’t change a medium-term dollar-positive view; a 25bp
hike would bolster Fed anti-inflation credibility and stabilize USD and long
yields. Brown Brothers Harriman says much tightening is already priced, limiting
upside from hawkish signals while dovish outcomes pose larger downside risk. TD
Securities flags buy-the-rumor/sell-the-fact risk: the dot plot’s signal on
subsequent hikes, not the 25bp itself, will determine USD direction; a dot-plot
that implies an October hike would extend dollar gains. Treasuries and gold: ING
says the 10-year could retest 5% regardless of today’s move as real yields rise.
Sprott does not see a rate move changing the long-term spot-gold trend;
tightening is mostly priced, so any pullback should be limited and short-lived,
while a hold could spark a rebound. BofA says a hawkish Fed reinforcing
anti-inflation credibility could lift the 2-year by ~5–10bps and push the
30-year down a similar amount; a dovish outcome could see the 2-year fall ~5bps
and the 30-year rise ~5bps.
