The Fed Holds, but the Pressure Builds

Liz Ann Sonders and Collin Martin respond to the Federal Reserve's decision to hold rates steady, noting two dissents in favor of a hike and continued concern about inflation from Chair Kevin Warsh. They describe a mixed market reaction, with short-term Treasury yields falling and longer-term yields rising, and then discuss how higher borrowing costs are creating sharper divides between stronger and weaker companies. The episode closes with a look ahead to the coming week's macroeconomic data releases.

1. The Fed held rates steady, with two dissents in favor of a hike and Chair Kevin Warsh continuing to flag inflation concerns.
2. Short-term Treasury yields fell while longer-term yields rose, and equities swung as investors weighed the implications for future rate moves.
3. Higher borrowing costs are pressuring the AI and data-center build-out and widening the gap between profitable and unprofitable companies and between stronger and weaker balance sheets.
4. Investment-grade corporate issuance reached a record even with elevated borrowing costs, and both hosts stress that headline resilience can mask pockets of stress.