Based on the latest futures market, the probability of a rate hike in September 2026 has dropped to 34.7%, down from more than 50% just a week ago.
No rate hike is good news for AI capex. Companies like Alphabet are issuing new bonds to fund their expansion, and a hike would have raised their cost of funds, squeezed profits, and possibly delayed plans to borrow more and expand faster to meet demand. That worry is off the table for now, at least for the next two months, so they can carry on.
Commodity prices are one thing worth watching. Not just oil, but copper, corn, and other raw materials that go into whatever we produce. They tend to lead the inflation numbers rather than follow them.
The prolonged Iran War sparked fears that inflation would come roaring back. New Fed Chair Kevin Warsh didn’t make things easier, keeping his cards close and refusing to signal the Fed’s intentions. Investors had to adjust to this new style, and that created fresh uncertainty.
Finally I see more reasons to be bullish than bearish, barring any sudden bad news. But let’s be clear about the timeframe. This is my read for the next one or two months, not a forecast for the rest of the year. And I could be wrong too. How things unfold from here will decide whether that call still holds.
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