Odds of a Fed Rate Hike May Rise, Emanuel Says

Watch on YouTube ↗  |  August 14, 2026 at 12:51  |  7:50  |  Bloomberg Markets
Speakers
Julian Emanuel — Evercore ISI

Summary

Evercore ISI strategist Julian Emanuel argues the AI-driven equity cycle remains intact long term but near-term complacency is elevated. He recommends hedging rather than selling, using cheap index protection, cash, and negative-beta sectors like energy, utilities, and health care. He sees odds of a September Fed hike nudging higher and warns that a 10-year Treasury yield pushing toward 5% would challenge stocks.

  • Emanuel sees long-term stocks higher but says AI does not negate cycles; a bear market will eventually happen.
  • Financial conditions are the loosest this century and market complacency concerns him.
  • He recommends cheap index protection and cash rather than cutting US equity exposure.
  • Negative-beta stocks, including energy, utilities, and health care, are working and dampen volatility.
  • He thinks the roughly 30% chance of a September Fed hike will nudge higher and could unsettle markets.
  • A 10-year Treasury yield above 4.75% toward 5% would be a warning zone for stocks.
  • His firm remains overweight the technology theme.
Ideas
Julian Emanuel Evercore ISI 0:33
Stay long tech despite cycle risk.
He remains constructive on US equities and the technology theme for the long term, arguing the AI bull market has intensified and elongated the stock cycle even though a bear market will eventually occur; his firm has been overweight technology for the entire bull market and he has not reduced US equity exposure, preferring to hedge rather than sell.
SPY XLK HIGH
Julian Emanuel Evercore ISI 2:03
Own negative-beta defensive sectors.
A large cohort of stocks is trading inversely to the S&P 500 on a day-to-day basis; this negative-beta group has worked well, includes energy, utilities and health care, and helps dampen portfolio volatility.
UTILITIES XLV XLE HIGH
Julian Emanuel Evercore ISI 3:06
Buy cheap index protection now.
With financial conditions at their loosest this century, complacency high, and the VIX near 14, he says index protection is very inexpensive ahead of the Fed, midterms, Iran, and an earnings season seen as good-as-it-gets; this setup historically produces volatility and corrections rather than ending the bull market.
VIX S&P 500 index options HIGH
Julian Emanuel Evercore ISI 3:06
Build cash to dampen portfolio.
He lists letting cash positions build as one of three ways to reduce portfolio risk amid market complacency and low headline volatility.
CASH LOW
Julian Emanuel Evercore ISI 6:50
Watch 10-year yield over 4.75%.
He is watching whether the 10-year Treasury yield pushes through 4.75% toward 5%, with the 30-year yield already making new cycle highs; in this bull market that is the level at which stocks begin to face more of a challenge.
10-Year Treasury Yield MED
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This Bloomberg Markets video, published August 14, 2026, features Julian Emanuel discussing SPY, XLK, UTILITIES, XLV, XLE, VIX, S&P 500 index options, CASH, 10-Year Treasury Yield. 5 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Julian Emanuel  · Tickers: SPY, XLK, UTILITIES, XLV, XLE, VIX, S&P 500 index options, CASH, 10-Year Treasury Yield