Possible scenario
Hikes Become Baseline
40% Chance
Musalem's call reinforces the September 2026 dot-plot message that inflation risks remain dominant. Markets increasingly treat at least one additional hike as the base case, with policy-sensitive assets repricing modestly rather than violently because the hawkish bias was already visible.
Initial impacts
- 10-year Treasury yield Up
- Riskier companies' borrowing costs Up
- Market volatility Up
- US dollar Up
Secondary impacts
- Technology -1.3%
- Utilities -1.1%
Portfolio impact
S&P 500-1.1%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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