The Dividend Cafe - Wednesday - September 16, 2026

Episode Date: September 16, 2026

Brian Szytel recaps a volatile Fed day in which the FOMC unanimously raised rates 25 basis points, moving the range from 3.50–3.75 to 3.75–4.00, a move largely priced in. He notes dot plots implying one more hike before year-end (around 4.00–4.25), with market reaction reflecting short-term yields up slightly, long-term yields down slightly, and the 10-year unchanged near 5.01. Markets sold off (Dow ~-740, S&P ~-0.6%, Nasdaq ~-0.1%) but improved off the lows, with internals not signaling a major risk-off flush. Economic data included stronger-than-expected August retail sales (1.2% vs 0.8%) and weaker NAHB homebuilder sentiment. He also answers a viewer question, distinguishing price spikes in items like oil from broad inflation driven by money supply, referencing CPI/PCE and headline vs core measures. 00:00 Welcome to Dividend Cafe 00:17 Fed Rate Decision 01:03 Yield Curve Reaction 01:28 Why Markets Lead 02:10 Economic Data Check 02:29 Market Close Snapshot 03:30 Inflation Question Explained 04:44 Wrap Up and Thanks 04:52 Disclosures and Disclaimers Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome 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 Saitel, your host here this evening. A bit of a volatile day in 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. taking rates up 25 bips is what they did. The 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 flattener. I say somewhat because we're really not talking about a lot of basis points here. But the 10 year closed unchanged, we're 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. 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 Warsh's 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 Warsh has been saying to the administration, a feather in the cap, labor is so strong we're going to get away with being able to raise rates because inflation is high, but 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 going to dramatically change inflation. It's one quarter of a point. David's got a full analysis of all this for your Friday Dividendon 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 on the month versus a 0.8% will take it. There was an NHAB home builder sentiment that was down a little bit weaker and missing 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%. SMP is down about 0.6%. Nasdaq's down about 0.1%. And again, we're coming off of those lows as we head into the close. So we may end up closing there a little bit better on the day. A percent 1.4 on 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, in markets. If you look at the internals, we've got 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 one 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've spent less on entertainment or other discretionary items like travel, things like that, that's not inflation, is it? It's an astute question because the answer.

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, then it 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 on 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. And 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 you listening very much. Thank you, as always. If you have any further questions, please reach out and we'll be back with you tomorrow on the Dividend Cafe. 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.

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