Fed Hikes Rates for the First Time Since 2023

Summary

The Fed raised rates for the first time since 2023, and markets sold off as 10-year yields held above 5% and short-end yields rose. Guests debated the implications for fixed income, AI investment, the yen, retirement portfolios and housing. The dominant message was that rate pressure is likely to persist, with defensive front-end income favored, AI capex resilient, the yen weak, and housing constrained by inventory and affordability.

• Fed hikes 25 bp unanimously; S&P and Dow fell while 10-year Treasury yield held above 5%.
• Ken Shinoda favors front-end Treasuries, agency MBS and AAA/AA credit; avoids long-dated bonds and flags AI/data-center credit correlation.
• Cecilia Rouse says inflation remains sticky, the labor market is resilient but data uncertain, and fiscal debt is adding to yields.
• Michael Spence says higher rates won't derail AI investment but will hurt housing and rate-sensitive sectors.
• Mark Sobel expects BOJ action but sees Fed-BOJ rate differentials pressuring the yen lower.
• Nick Nefouse argues retirees still need meaningful equity exposure and private markets only if they beat benchmarks.
• Bess Freedman describes a tough housing market with locked-in sellers, low inventory and affordability pressure, though luxury and NYC are more insulated.