Fervent Wealth Management

Stock Market Insights

By Dr. Richard Baker, AIF®

Fed Rate Hike Signals Independence Under Chairman Kevin Warsh

My college-age son wanted to list his car for sale online last weekend. His taillight had not worked for a while, and we couldn’t figure out how to repair it. He decided to take his car to a local shop to get it repaired because he felt it was important to say in the ad that “everything works as it should.” The Federal Reserve (Fed) showed us last week that they weren’t being influenced by politics, and that “everything is working as it should.”

The Federal Reserve raised rates by a quarter percentage point last week for the first time since 2023. The widely expected decision was approved unanimously by the Federal Reserve’s (Fed) governors, yet that wasn’t the most important part of the story for me. The real story is that Kevin Warsh, the new Federal Reserve chairman, is no puppet of the administration.

One question many people had going into last week’s interest rate decision was the Fed's independence, particularly whether Chairman Warsh would only do what President Trump told him to do.

President Trump was frequently vocal that he thought former Chairman Powell was keeping rates too high. It was no secret that Trump had Warsh brought in specifically to lower interest rates. Last week proved to be a pure test of the Fed’s independence because recent data showed a strong labor market and inflation remained above the Fed's 2% target. This necessitated a rate increase even if the president didn’t want one. The Fed proved itself again as unbiased and doing what was best for America, as it was designed to do.

Many people expected a negative reaction from President Trump over this decision. A White House spokesman called the decision “unfortunate,” and the president posted on social media that “rates should be lower.” Yet, he did not criticize the Fed, the new chairman, or the rate hike.

Investors who worried that a chairman picked by Trump might only go along with the President's desire for lower interest rates were relieved. When push came to shove, the new chairman and the Fed still navigated to a raise rates when it was needed.

In the week following the Fed decision, the S&P500 was up over 2.5%, and the Dow was up just under 1%. The best part is that they did so because of normal market conditions, without the added stress of the Federal Reserve system not being independent. There is already so much going on in the market that we don’t need the added stress of being concerned about a politicized financial system. Chairman Warsh put this to bed in his press conference when asked about when he last spoke to the president. He said, “I don’t have anything for you on discussions with the president. Part of the independence of the Federal Reserve is we stay in our lane.” Investors and all Americans collectively said, “Amen.”

I am unashamedly a proud American. The more I travel to third-world countries being run by dictators, the more I appreciate the independent branches and financial systems of our great country. Is our government perfect? Far from it. Do parts of our government frustrate me? More than you know. Still, I am at peace knowing this imperfect government is the best in the world. The way the Fed conducted itself last week reminded me of that. It is best to let the markets do their thing and let financial guardrails do their job.

An older lady came to look at my son's SUV on Sunday because she needed a new “grocery getter.” She asked if anything was wrong with it, and my son smiled, looked at me, and said, “Ma'am, everything works as it should.” I think Chairman Walsh just said the same thing.

Have a blessed week.

www.FerventWM.com

This article was written by humans for humans because AI doesn’t have this quality of sarcasm.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly.

The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful.

Source: 1.https://www.politico.com/news/2026/09/16/fed-rates-trump-warsh-inflation-01079371

Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.

We are so excited and proud to share that our very own Matt Greenwalt CPFA® has obtained The Certified Plan Fiduciary Advisor from National Association of Plan Advisors (NAPA)! Congratulations on this accomplishment!

Stocks Open Lower on Inflation and Economic Jitters Amid Fresh Gains in Oil.

At the Open: The S&P 500 was poised for a weaker open, paring back its week- and month-to-date advance. Thursday’s headlines continued to surround angst around inflation and the economy showing signs of running hot, keeping pressure on longer-dated Treasuries, while the short-end felt some relief after yesterday’s spike. Higher yields alongside brent crude recapturing the $105 per barrel market weighed on equities, with oil’s latest move higher stemming from Tehran warning that the conflict may expand if strikes continue (overshadowing more reports of improved oil transit through the Strait of Hormuz). The dollar strengthened, pacing its longest winning streak since May.



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Stocks Open Slightly Lower As Crude Aims To Snap Its Losing Streak


At the Open: U.S. futures edged lower ahead of Wednesday’s opening bell as Brent crude prices returned to the $100-per-barrel mark to end a five-day run of losses. A rise in Treasury yields across the curve and a stronger dollar also acted as a headwind for equities, while investors parsed reports of an attack on a cargo vessel in the Strait of Hormuz as a reminder that the situation remains tense following Tuesday’s upbeat remarks on U.S.-Iran progress. Additionally, artificial intelligence (AI)-related shares cooled after recent gains amid market discussions about cheaper frontier models. On the macro front, business activity data from S&P Global is set for release shortly after the open.



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Stocks Open Little Changed as Markets Monitor Geopolitical Updates


At the Open: S&P 500 futures held Monday’s gains, but were little changed ahead of Tuesday’s cash equity open. Geopolitics and energy prices were top of mind as crude futures reversed overnight gains to remain on the defensive following reports that Iran proposed to reopen the Strait of Hormuz within a week if the U.S. blockade is lifted. However, some tech weakness after yesterday’s rally and wait-and-see trading ahead of President Trump’s United Nations address and potential meetings with Gulf leaders kept stocks near the flatline. Treasury yields eased across the curve, while gold and the U.S. dollar steadied.


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Stocks Open Higher as Treasury Yields, Oil Futures Ease

At the Open: U.S. equity futures were poised to start the week on a strong note amid broad diplomatic optimism. Lower crude prices were credited as the main tailwind for risk appetite Monday morning as a six-month high in Strait of Hormuz traffic, a recovery in Saudi exports, and hopes for diplomatic progress at this week’s United Nations meeting sent oil lower for a fourth day — on pace for its longest stretch of declines since June. Simultaneously, the artificial intelligence trade received a lift from positive remarks around U.S.-China talks ahead of this week’s Trump-Xi summit. Falling Treasury yields were also supportive for stocks, with the 10-year yield trading near 4.96%.



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A Strange Combination and a Resilient Stock Market
By Joe Shearrer

One of the more surprising stories in financial markets this year has been the resilience of stocks despite a significant rise in interest rates. The yield on the 10-year U.S. Treasury recently crossed 5%, reaching its highest level since 2007. At the same time, the S&P 500 remains up double digits for the year and, despite some recent weakness, is still less than 3% below its August record high.

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A Strange Combination and a Resilient Stock Market One of the more surprising stories in financial markets this year has been the resilience of stocks despite a significant rise in interest rates. The yield on the 10-year U.S. Treasury recently crossed 5%, reaching its highest level since 2007. At the same time, the S&P 500 remains up double dig

Stocks Open Mixed Following Thursday’s Bounce as Yields Rise, Oil Steadies

At the Open: Equity futures fluctuated Friday morning, hovering near Thursday’s close. Few new developments left stocks in a holding pattern, with the tech-heavy Nasdaq faring best among major averages as chipmakers aimed to extend yesterday’s rally. More broadly, oil prices coming off pre-market lows to remain firmly above $100 per barrel and Treasury yields clawing back some of yesterday’s declines dampened hopes of extending Thursday’s risk-on mood. Market chatter also highlighted the potential for some choppy trading, as estimates point to around $7 trillion of options set to expire in today’s quarterly triple witching. The dollar strengthened, and gold edged higher.



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Stock Market Insights

ByJoe Shearrer, CPFA®

A Strange Combination and a Resilient Stock Market

One of the more surprising stories in financial markets this year has been the resilience of stocks despite a significant rise in interest rates. The yield on the 10-year U.S. Treasury recently crossed 5%, reaching its highest level since 2007. At the same time, the S&P 500 remains up double digits for the year and, despite some recent weakness, is still less than 3% below its August record high.

Normally, those two things don't necessarily go together. That phrase made me think about a recent trip to Taco Bell with my kids. Since we were eating inside, they got to make their own drinks from the self-serve soda machines. As usual, they decided one soda wasn't enough. They mixed two different flavors together to create their own combination. I looked at them and thought, I'm pretty sure those two things aren't supposed to go together. However, for some reason they seemed to like it.

Financial markets can sometimes give us that same thought. You can have two things that don't traditionally seem to belong together sitting side by side. Higher Treasury yields create competition for stocks. When investors can earn around 5% on a 10-year Treasury, they may become less willing to pay high valuations for equities. Higher rates can also increase borrowing costs for businesses and consumers.

We are already seeing some of that pressure show up in stock valuations. The S&P 500's forward price-to-earnings ratio has fallen to around 19 times expected earnings. So why haven't stocks fallen more? The answer, at least so far, has been earnings.

Think of stock prices as being influenced by two sides of a scale: what investors are willing to pay for each dollar of earnings and how much those companies actually earn. Higher interest rates can push the first side of the scale lower by making stocks less attractive at elevated valuations. However, when corporate earnings are growing, that growth can help counterbalance the pressure. That appears to be an important part of the story playing out in the market today.

Corporate earnings have continued to grow, helping offset the decline in valuations. AI investment has played an important role, with enormous amounts of capital being invested in data centers, semiconductors and other infrastructure needed to support the continued expansion of AI. That creates an important distinction for investors. A 5% Treasury yield by itself doesn't necessarily mean stocks have to fall. The bigger concern would be a rapid, disorderly increase in rates or a situation where higher borrowing costs begin materially hurting corporate profits.

There are certainly reasons for caution. Higher interest rates, elevated oil prices, geopolitical uncertainty and still-elevated stock valuations create plenty of opportunities for volatility. A normal 5% to 10% market pullback shouldn't surprise anyone after the gains we've experienced. That said, volatility and a deteriorating investment environment aren't necessarily the same thing.

Rather than focusing on one particular interest-rate level, investors may be better served watching the relationship between rates and corporate earnings. If earnings continue growing, the market may be able to absorb higher rates better than many expect. If profits begin weakening while rates remain elevated, however, that would be a much more meaningful warning sign.

And just like my kids' self-created soda combinations, sometimes two things that don't seem like they should go together can work just fine. The important question is whether the combination continues to work.

Have a blessed week!

Joe Shearrer

www.FerventWM.com

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly. Market conditions and Fed expectations can change quickly. This article reflects information available on the morning of September 16, 2026, before any Federal Reserve announcement.

All investing involves risk, including loss of principal. No strategy assures success or protects against loss. Any economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.

Sources: https://www.reuters.com/business/finance/stocks-wobble-no-sign-panic-yields-surge-2026-09-15/