Jeffrey Rosenberg, portfolio manager of the systematic multi-strategy fund at BlackRock, has indicated that a 25 basis-point interest rate hike by the Federal Reserve would not pose a significant issue for risk assets. This statement was made during his appearance on "Bloomberg Surveillance" on September 4, 2026, ahead of the Fed's recent decision to raise rates.
However, the overall bond market is experiencing what some analysts describe as a "toxic stew," influenced by the Fed's decision, persistent inflation, geopolitical conflicts, and advancements in artificial intelligence. These diverse factors are collectively driving up bond yields and causing a repricing of market expectations regarding future Federal Reserve policy.
The Federal Reserve indeed raised interest rates by a quarter percentage point on September 16, 2026, bringing the benchmark rate to a range of 3.75%-4.00%. The central bank also signaled an additional hike later this year and projected the policy rate to be in the 4.00%-4.25% range by the end of 2026. This move, aimed at containing inflation, marks the first rate increase since 2023.
Despite the rate hike, US Treasuries largely held their gains, with the 10-year yield remaining lower by five basis points at 4.95%. Federal Reserve Chairman Kevin Warsh emphasized that this policy action is intended to support a timelier drop in inflation, a decision made unanimously by the Federal Open Market Committee. Warsh is scheduled to hold a press conference at 2:30 p.m. EDT (1830 GMT) to discuss the Fed's outlook.
