Amid the breathtaking relief rally on Wednesday, the media tried to spin the notion that the Federal Reserve might consider cutting interest rates. The Fed minutes point to the opposite.
In last month’s Fed meeting (March 17-18), the minutes indicated that some participants considered rate hikes. Members thought that the conflict in Iran, combined with inflation above the bank’s 2% target rate, would merit a rate hike.
Stock markets are neutral on their expectations for future rates. The iShares 20+ Year Treasury Bond ETF (TLT) added 27 bps in the week and is nearly flat (-0.28%) in 2026. Bank stocks are now brushing off the risks of an economic slowdown.
JPMorgan Chase (JPM) gained 4.69% on Wednesday, though shares lost 4.42% in 2026.
Markets share the Fed’s concerns for inflation staying higher for longer. Consumer discretionary stocks are performing poorly. P&G (PG) is at risk of re-testing a 52-week low. Food stocks have mixed performance. Mondelez (MDLZ) gained 11.6% in the last quarter, matching Pepsi (PEP)’s performance. Conagra (CAG) is hovering near a 52-week low.
The private credit market needs lower interest rates. Blue Owl Capital (OWL) attracted a 20.1% short float. Asset managers such as Brookfield (BAM), Blackstone (BX), and BlackRock (BLK) traded at yearly lows. Their stocks rebounded recently. That increases profit-taking risks, which would send shares back to their lows.
