SEP · ISSUE 38 · September 15, 2026
FOMC · TOMORROWThe Fed decides tomorrow and the scare would be a no-hike
The market treats a 25bp hike as done. The binary risk is the opposite scenario.
HIKE PROB. (CME)
84%
derivatives even higher
S&P 500 CLOSE
7,620
-0.48% on the day
VIX
17.6
still <20, no flush
THE NUMBER
84%
priced odds of a 25bp hike
The move from 3.50-3.75% to 3.75-4.00% is nearly a lock. That's why the risk isn't the hike itself (already in the price), but what the dot plot shows and what happens if the Fed disappoints and holds.
NUMBER
ZOOM IN84%
84%
▲ hike probability · cut nearly ruled out
It's like walking into an exam knowing the question: if it shows up, nothing moves. What moves is the question you didn't expect.
With the hike this heavily priced, the price already carries it. What's left to price is the tone and the rate path.
- PRICED IN
- — When the price already reflects an event before it happens.
- CME FEDWATCH
- — Tool that estimates the odds of each Fed decision.
QUOTE
AUTHORITYWhat's priced in doesn't move markets
“The market doesn't react to the decision it expects: it reacts to the one it didn't, and to whatever the Fed hints about what comes next.”
The desks' consensus is already in the price. The real focus is the rate path the dot plot lays out.
- DOT PLOT
- — Chart showing each Fed member's rate forecast.
- GUIDANCE
- — Signals the central bank gives about its next moves.
TREND
LAST SESSIONSThe index reaches the FOMC glued to support
It arrives just 0.8% above the first systematic selling wave at 7,558.
The S&P 500 slides off its highs toward the 7,500-7,558 zone, exactly where the market marks key support.
- SUPPORT
- — A price level where buyers tend to step in.
- CTA
- — Systematic funds that buy or sell based on the trend.
SCENARIOS
WHAT TO WATCHThree ways the market can read the FOMC
HIKES AND SOUNDS HAWKISH
Base case. It hikes 25bp and the dot plot points to more. Stocks digest it, but long bonds can stay under pressure.
HIKES AND SOFTENS
It hikes but hints this is the last one. The friendliest outcome for stocks and bonds: the market would exhale.
NO HIKE
The unlikely one. Against the 84% priced in, long bonds could spike and trigger an immediate stock scare.
The hike is in the price. The reaction depends on these three variables, not the headline.
- HAWKISH
- — A hard tone: the central bank prioritizes fighting inflation with high rates.
- DOVISH
- — A soft tone: the central bank leans toward cutting or holding rates.
CONTEXT
KEY WEEKThree pressures land in the same week
Three supports vanish almost together: that's why volatility has room to climb.
It isn't just the FOMC. Three events pull support out from under the market at once.
- OPEX
- — Options and futures expiry day; often brings volatility.
- BLACKOUT
- — Window when companies cannot buy back their own shares.
WATCHLIST
5 KEY ETFsFive ETFs to read the FOMC reaction
| VOO | 695.62 | ▼ -0.5% | S&P 500. The direct gauge of how the decision lands. |
| TLT | 84.10 | ▼ -1.0% | 20+ year Treasuries. This is THE variable: a no-hike sends it flying. |
| SOXX | 241.50 | ▼ -4.8% | Semis. Most exposed to high rates and the mechanical rotation. |
| IGV | 112.30 | ▲ +0.3% | Software. Where Goldman flags the rotation is heading. |
| BIL | 100.08 | → +0.01% | 1-3 month bills. A parking spot while long bonds stay tense. |
Each tells a different part of how the market digests the decision.
- ETF
- — A listed basket that tracks an index or sector.
- ROTATION
- — When money shifts from one sector to another without leaving stocks.
WRAP
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- FOMC
- — The Fed committee that sets US interest rates.
- DOT PLOT
- — Chart showing each Fed member's rate forecast.