The Fed raises rates for the first time since 2023
The Federal Reserve raised interest rates last week for the first time since 2023, and the 10-year Treasury yield rose to near 5%. Stocks were mixed.
| Week ending September 18 | Change or level |
|---|---|
| S&P 500 | −0.1% |
| Dow Jones Industrial Average | −1.7% |
| Nasdaq Composite | +0.7% |
| 10-year Treasury yield | Near 5% |
| Fed funds target range | 3.75%–4.00% (up 0.25 percentage point) |
What happened
- The Fed hiked. The committee voted unanimously to raise its target range by a quarter point, to 3.75%–4.00%, citing inflation that “remains elevated” while describing economic activity as expanding at a solid pace. Most officials projected at least one more increase before year-end.
- Bond yields rose. The 10-year Treasury yield rose to near 5%. Rate-sensitive sectors lagged, with utilities down about 3%; health care bucked the trend, gaining about 1.8%. Eight of the 11 S&P 500 sectors ended lower.
- The economy stayed firm. August retail sales rose 1.2%, above expectations, and initial jobless claims fell to 196,000.
- Energy stayed in focus. Oil eased back below $100 a barrel late in the week as Middle East supply concerns moderated.
What it means for business owners
- Borrowing costs are rising again. Lines of credit and new loans may cost more; ask your lender or CPA how this affects your business.
What it means for retirement plan participants
- Bonds adjust. Rising yields push existing bond prices down in the short run, but they also mean new bond purchases, including inside target-date funds, can earn higher income going forward.
- Stay the course. Weeks like this are a reminder of why diversified, age-appropriate allocations exist. For long-term savers, continuing regular payroll contributions matters more than any single Fed meeting.
The week ahead
This week brings purchasing managers’ surveys (Wednesday), new home sales (Thursday) and durable goods orders (Friday), plus a scheduled meeting between Presidents Trump and Xi on Thursday.
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Request a plan reviewMarket data from public sources believed reliable, as of the week noted. Indexes are unmanaged and cannot be invested in directly. Past performance does not guarantee future results. This commentary reflects Pleasanton Wealth’s opinions as of the date of publication, which may change without notice, and is general information only. It is not a recommendation to buy or sell any security, nor individualized investment, tax or legal advice.