Wednesday - September 16, 2026

0:00Welcome to the dividend cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Welcome to dividend cafe. This is Brian Cytel your host here this evening. A bit of a volatile day at markets. This was Fed day so we got the FOMC meeting that concluded after its two day meeting and they unanimously voted to raise interest rates by one quarter of a point that's 25 basis points. This was largely priced in already at least for the last couple of weeks but you had the rate taken up from 350 to 375. It is now a range of 375 to 4 and the dot plots show there's going to be one more rate hike before the end of the year so call it 4 to 4 and a quarter by Christmas time. The comments were actually fairly positive as far as the statement goes they cited the strong economy, the resilient economy, the labor market that was hanging in there just that inflation was higher and they needed to be slightly more restrictive on policy and so taking rates up 25 bips is what they did.

1:03The bond market had largely already priced this in so you did get two year yields up a little bit and 30 year yields down a little bit and we've spoken about that a few times as this being essentially somewhat of a curve flatener. I say somewhat because we're really not talking about a lot of basis points here but the 10 year closed unchanged were at 5.01 those midterm and long term rates either are unchanged in other words went down not up short term rates are all that moved. Look the way this is supposed to work it's not supposed to be the markets are waiting on the Fed to decide where they should go the market should be pricing all things in real time and then the Fed should be moving along with them that's what's worse as intention has been and that's what occurred this time around. I'd even go so far as to say that's a good thing but sitting the strength in the labor market is good. I think it's also something that Worsh has been saying to the administration but further in the cap labor so strong we're going to get away with being able to raise rates because inflation is high we can take it and guess what the long end of the curve will come down a little bit but none of this is going to open the straight of her moves none of it's

2:03going to dramatically change inflation it's one quarter of a point David's got a full analysis of all this for your Friday dividend cafe so I'll leave it there. There were a couple of things in the economic calendar we had retail sales that were better than expected for the month of August so that's a good thing obviously 1.2% growth in the month versus a point 8% will take it there was an NHAB homebuilder sentiment that was down a little bit weaker and makes it consensus for the month and then of course the FOMC news the markets did sell off although off of the lows a little bit before the close and I'm recording this about 12 minutes before the close so if the numbers change slightly give me some grace but we're down about 740 on the Dow these days that equals 1.4% SMPs down about 0.6% NASDAQs down about 0.1% and again we're coming off of those lows as we head into the close so we made up closing there a little bit better on the day a percent 1.4 on the blue chips being down on Fed days it's not ideal but it's also not unheard of and this isn't a huge risk off day I would say at markets if you look at the internals we've

3:06got a down day but it isn't really a flush out or anything like that markets are taking this in stride and they were largely priced in I do think the dot plots showing just 1 rate hike next year and then rates being on hold for 2027 signals a lot to markets and my guess is that markets are going to actually rally around this news because sometimes the fear of the unknown is better to have known for markets than to not otherwise so the question that came in there today was about inflation and if the price of some things that are more spiking like oil for example when a household budget has a set amount of money they can spend if oil prices are higher that just means you spend less on entertainment or other discretionary items like travel things like that that's not inflation is it it's a stooot question because the answer is no that isn't inflation if the same amount of money and the same amount of dollars are still chasing the same amount of goods and services than doesn't cause a broad increase in prices you're right if just one of those components goes up a lot because of a supply chain issue then technically that just means that less is spent on some of the other items so we're with you

4:10on that what we're really talking about is the money supply increasing and chasing the same amount of goods and services that's the economic phenomenon and there's different magnitudes around all of those things but when you look at the combination of something like CPI and PCE they're taking that broad basket when we cite things like headline versus core it's because we're taking out things that are very seasonal and very cyclical and very volatile like food and energy so that you can just see the broad basket things like airline tickets and insurance costs and home costs and all those things together so that's what we have for you today we appreciate listening you as always if you have any further questions please reach out and move back with you tomorrow on the dividend cafe the Bonson Group is a group of investment professionals registered with high-tower securities LLC member Finra and SIPC with high-tower advisors LLC a registered investment advisor with the SEC securities are offered through high-tower securities LLC advisory services are offered through high-tower advisors LLC this is not an offer to buy

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