Name: September 2026 FOMC Debrief
Uploaded: 2026-09-16T23:20:09+00:00
Duration: 2111 s

Speakers

Joseph Wang — Author, Central Banking 101 / ex-Senior Trader, Federal Reserve

Jack Farley — Host, Monetary Matters

Summary

Jack Farley and Joseph Wang debrief the September 2026 FOMC meeting, where the Fed hiked and Chair Warsh struck a hawkish tone. Wang argues the Fed is not restrictive and expects at least two more hikes, while also favoring long bonds and 30-year TIPS for carry, flight-to-safety, and high real yields. They discuss equity bubble risks, housing weakness, Treasury buybacks, balance sheet composition, and global central bank tightening.

Fed hiked in September 2026; Warsh called it removing accommodation and the vote was unanimous.
Wang sees at least two more hikes and higher-for-longer policy.
Wang likes long bonds and 30-year TIPS; cites positive carry and high real yields.
Wang calls the stock market a dangerous equity bubble and warns hiking cycles hurt risk assets.
Housing market is deteriorating further; mortgage rates above 7% and high-end faltering.
Discussion covers Treasury buybacks, balance sheet shift to bills, and basis trade dynamics.
Global tightening: ECB and BOJ are also hiking.

Ideas

Joseph Wang Author, Central Banking 101 / ex-Senior Trader, Federal Reserve 1:40

More Fed hikes, higher front-end yields.

Wang expected the September hike and believes the Fed's hiking cycle is not one-and-done. Chair Warsh described policy as still accommodative, said the Fed is removing a dose of accommodation, the decision was unanimous, and the dot plot and higher neutral-rate revisions imply at least two more hikes and higher-for-longer policy, supporting higher front-end Treasury yields.

Joseph Wang Author, Central Banking 101 / ex-Senior Trader, Federal Reserve 16:45

Long bonds attractive on safety and carry.

He loves the long bond: 30-year yields around 5.35% offer positive carry, and if the equity bubble bursts the Fed would cut rates and trigger a flight to safety, giving long bonds the most upside. An AI-driven productivity/deflation scenario would also help, and the Fed's inflation-fighting credibility improved after today's meeting.

Joseph Wang Author, Central Banking 101 / ex-Senior Trader, Federal Reserve 16:50

30-year TIPS real yield historically attractive.

30-year TIPS yield about 3.1% real, which he calls historically high and not seen for decades. This is attractive especially for investors worried about inflation because it locks in a high real yield.

Joseph Wang Author, Central Banking 101 / ex-Senior Trader, Federal Reserve 17:02

U.S. equities in dangerous bubble.

He sees the stock market as a tremendous equity bubble, with investors overly levered and believing things go up forever. A repeat of the last hiking cycle would not be good for risk assets, and the Fed may want to take air out of equities to reduce the wealth effect and demand.

Joseph Wang Author, Central Banking 101 / ex-Senior Trader, Federal Reserve 24:10

Housing bottom not in yet.

Mortgage rates above 7% and the lock-in effect are hurting housing. The weakness is spreading from lower-end leveraged buyers to the high end, so the housing market is deteriorating further and the bottom is not in yet, especially if mortgage rates stay high and the stock market falls.

September 2026 FOMC Debrief

Summary

Ideas

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