The Dividend Cafe - Wednesday - June 17, 2026

Episode Date: June 17, 2026

David Bahnsen recaps a major market day following the first FOMC meeting chaired by Kevin Warsh, where the Fed left rates unchanged but offered a notably brief statement with little forward guidance. The dot plot implied higher rates ahead, though Warsh declined to submit his own projection, reinforcing his opposition to forward guidance as a policy tool. In his first press conference, Warsh announced five task forces covering Fed communications, the balance sheet, data sources, productivity and jobs, and inflation frameworks, and emphasized focusing on what data says about the economy rather than predicting the Fed’s reaction. Markets sold off: the Dow swung from +280 to close -500, the S&P fell 1.25%, and the Nasdaq more than 1.25%, alongside a yield-curve flattening with short rates up far more than the 10-year. All 11 S&P sectors ended down. 00:00 Welcome and Setup 00:10 Fed Meeting Recap 01:14 Dot Plot and Guidance 01:55 Five Fed Task Forces 02:44 Reaction Function Critique 04:17 Market Selloff and Yields 05:29 Sector Performance Breakdown 06:02 Economic Data Check 06:26 Wrap Up and Sign Off Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Hello and welcome to the Dividend Cafe's daily recap. This is David Bonson filling in for my partner, Brian Saitel, out of the country with his family. And we had a major day today in markets as the very first FOMC meeting completed. with Kevin Warsh as the Federal Reserve Chairman. FOMC is, of course, the Federal Open Market Committee. And as was totally 100% completely known and expected, the Fed did not change interest rates,

either raising or cutting. But we all waited with bated breath for what the announcement would be. And the announcement, which we assume will be, part of the new Fed regime under Chairman Warsh was really short and really simple and really lacking in forward guidance. And Warsh did, I'm not saying this tongue in cheek, he did reiterate that this is all by design. The line that stuck out to me was that this committee will deliver price stability at Warsh in his first ever press conference.

They went forward with a dot plot where the Fed governors said their expectations for future rates, all of which indicated higher rates into the future, but Chairman Warsh himself confirmed that he declined to give a projection for this dot plot. It would be hard to interpret almost anything done or said today, anything other than hawkishly, although I think that there's a really interesting nuance in Warsh's declining to provide a projection, and I believe it reaffirms his strong opposition to using forward guidance as a policy tool. But what Warsh did do in the press conference today was say that he was appointing five task forces, one around the Federal Reserve's communications, a second around the balance sheet of the Fed, the quantitative easing

and tightening and the large amount of bonds the Fed holds on its balance sheet. Number three, the Fed's reliance on data sources for a task force on productivity and jobs. I think he is very interested in potential productivity enhancements that may come in this technologically transformative moment and the impact on labor. And then number five, the inflation frameworks that the Fed is. using or has been using. The far and away most encouraging thing that I heard, and I really liked everything I heard from the chairman today, but the part that I would say was just music to my ears that I honestly didn't think he'd get this specifically and positively philosophical was inciting

some of the reform areas needed, but he believed people, economic actors, those doing what they do that creates economic activity, need to spend more time asking what is the data telling us about the economy and less time asking, how will the Federal Reserve react to the data? In other words, he wants the data to fundamentally matter not as part of a Fed reaction function. And this criticism of a Fed reaction function, you are probably used to hearing it from me. if you have been listening to me for any period of time in my writing and speaking. And it really was music to my ears to hear the new Fed chair himself critique this dynamic. It is hard for me to explain how counter productivity this embedded Fed reaction function is

and the amount of financial activity that takes place because people are trying to ascertain what the Fed might think about something as opposed to actually analyzing it itself and trying to better understand the economy and our own decision making and so forth and so on. The hawkishness of it all and impact to rates obviously had to bleed through to markets. The Dow had been up 280 points in its high earlier today and it closed down 500 points. So you've got nearly an 800 point intraday swing. The S&P dropped 1 and a quarter percent, the NASDAQ over 1 and a quarter percent in the aftermath of this. And a lot of this equity market action is tied to this,

but the most profound thing that really happened was the yield curve flattening. And that has an impact in risk assets. But you had the one year and two year up 17, 18 basis points in the bond yield. And then you had the 10 year up seven basis points. So all bond yields across the curve were up, but way more on the short. short end than the long end, which is what we refer to as a flattening of the yield curve. I think, and I did not look this up because I needed to record, so there wasn't enough time for me to confirm, but I'm almost sure that this is the first day of the year.

Everyone knows that I'm getting older than I used to be, so my unprecedented memory might be failing me. But I have a pretty good memory for these things, and I do not recall another day this calendar a year in which all 11 sectors in the S&P were down in the same day. And today, the best performing sector ended up being industrials, which was down 12 basis points, far better than communication services, which were down three percentage points. And you had some pretty dramatic losses in some of the big tech names there. That's the scoop on the day. As far as economic data points, ending home sales were up nicely in the month of May, better than expected after would have been a tough April.

Retail sales rose in May, 0.8% excluding autos. They're up about 7% versus a year ago. Net of inflation, that means up somewhere around 3 to 4%. Nothing major on the economic front. I've given you the big market action. I'll be back with you again tomorrow, doing the same in this daily recap. Thanks for listening to Dividy Cafe. reach out with any questions any time.

The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered through Hightower Advisors, LLC. This is not an offer to buy ourselves securities. No investment process is free at risk. There's no guarantee that the investment process or investment opportunities referenced to Rian will be profitable.

past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary and does not constitute investment advice. The Bonsor Group in Hightower shall not in any way be liable for claims and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced.

The data and information are provided as of the date reference, such data and information are subject to change without notice. This document was created for informational purposes only, the opinions expressed, are solely those of the Bonson Group and do not represent those of Hightower Advisors LSC or any of its affiliates. High Tower advisors do not provide tax or legal advice. this material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client's individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for any related questions.