Topic Intelligence: miffed

Prediction markets are now betting the Federal Reserve will not cut rates at all in 2026, after the Fed held rates unchanged for the third consecutive meeting on Wednesday. This represents a dramatic shift from earlier expectations of multiple cuts this year.

Higher-for-longer rates support the dollar and benefit financials, but pressure growth stocks, real estate, and leveraged buyout activity. Bond yields remain elevated, making equities less attractive on a risk-adjusted basis and potentially capping multiple expansion in 2026.

The Fed's hawkish hold signals confidence inflation is sticky and geopolitical shocks (Iran war) justify caution. This locks in a restrictive policy stance that could slow growth if energy prices remain elevated.