Fed Chair Kevin Warsh and the FOMC Just Fired a Warning Shot at the Second-Priciest Stock Market in History

Fed Chair Kevin Warsh and the FOMC unanimously raised the federal funds rate by 25 basis points to 3.75%-4.00% on September 16, 2026, signaling additional rate hikes expected before year-end. The rate hikes are driven by persistent inflation fueled by tariffs, the Iran war, and energy supply disruptions. With the stock market at historically expensive valuations near dot-com bubble levels and heavily dependent on AI infrastructure investments financed by debt, rising lending costs could slow growth and create significant downside risk.