Economics
Fed held rates as Trump rolled out tariff-immigration plan
The Fed kept rates steady and the S&P 500 avoided a $740 low as Trump announced a new tariff-immigration plan.
The Federal Reserve left its policy rate unchanged at its September meeting, ending speculation about a rate cut. Economic data confirmed the United States avoided negative GDP growth throughout the first three quarters of 2026, indicating continued expansion. Treasury yields stayed above the 4.76% threshold in September, and the S&P 500 remained above the $740 level that had been identified as a potential low. On September 30, President Trump unveiled a new tariff and immigration framework.
The decision aligned with the broader view that inflation pressures persisted despite solid growth.
The quarterly GDP reports for Q1, Q2 and Q3 showed positive growth rates, confirming that the economy did not contract in any of those periods. This performance contrasted with earlier warnings of a possible recession. The sustained expansion supported confidence in corporate earnings and investment plans.
Throughout September, the 10-year Treasury yield never fell below 4.76%, remaining within a narrow band above that level. The stability of long-term yields reflected balanced expectations for future inflation and monetary policy. Investors cited the consistent yield as a factor in maintaining portfolio allocations to fixed-income assets.
The index's performance reinforced the view that the U.S. economy remained on an upward trajectory.
Analysis
Holding rates while the economy grew suggests the Federal Reserve sees enough momentum to avoid immediate easing, yet it remains cautious about inflation. The decision reduces short-term uncertainty for borrowers but leaves future policy direction dependent on upcoming data.
Positive GDP growth through Q3 eliminates the immediate risk of a recession, which could have pressured fiscal policymakers to adopt stimulus measures. With growth intact, fiscal outlooks may focus on sustaining expansion rather than mitigating contraction.
Stable Treasury yields above 4.76% keep government borrowing costs predictable, aiding budget planning and limiting surprise spikes in debt servicing.
The S&P 500's avoidance of the $740 low reflects investor confidence tied to the solid growth and steady monetary stance.
What this was built from
Each claim above traces to a market below, at the price it was trading when this edition went to press.