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Interest Rate Movements

2026-09-18

The Fed raised the federal funds rate by 25bp, to 3.75%-4.00%, at its September meeting. While this move was widely anticipated, a rising rate environment marks a significant shift from Fed and market projections from last December:

Both the Fed and markets had expected the federal funds rate to fall by 25bp-50bp in 2026, and then ultimately settle in the 3.00%-3.50% in the longer run. In the last 9 months, however, progress against inflation has unfortunately reversed:

Source: Federal Reserve

Core PCE inflation is expected to be about 3.4% in 2026, which would represent an undoing of the modest downward movement of the past 3 years. The Fed is currently projecting 1 more 25bp rate increase in 2026, and perhaps another in 2027:

Source: Federal Reserve

12 out of 18 FOMC participants expect 1 more 25bp rate this year, to 4.00%-4.25%; for 2027, there’s a minor split between those 8 individuals who expect rates to be 4.25%-4.50%, and the 10 who anticipate rates of 4.00%-4.25%, or lower.

Markets, however, are somewhat more pessimistic. CME FedWatch’s market derived numbers suggest that the federal funds rate is most likely to end up at 4.50%-4.75% by the end of next year:

Source: CME FedWatch

AI’s heavy demand for credit, as well as large U.S. fiscal deficits, have helped push long-term Treasury rates higher, with the 10-year rate hovering at about 5% and the 30-year rate over 5%. With shorter-term rates of about 4% as well, the ultra-low interest rates of the 2010s are becoming an increasingly distant memory.

JMS Capital Group Wealth Services LLC

417 Thorn Street, Suite 300 | Sewickley, PA | 15143 | 412‐415‐1177 | jmscapitalgroup.com

An SEC‐registered investment advisor.

This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or investment strategy. This material has been prepared for informational purposes only, and is not intended to be or interpreted as a recommendation. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice.

AI Links

2026-09-04

Here are some of the AI-related writings that caught our attention this past month:

1. Reed Albergotti interviewed Bill Gates, whose views on AI have shifted dramatically in three years, from optimism to fears of economic catastrophe and bio-terrorism

2. Gates’ post, which can be found here, expresses three primary concerns—broad job displacement, increased ability for bad actors to cause widespread harm, and stunted childhood social and educational development

3. Seeking an AI analogy, Justin Wolfers writes about the Victorian bootmaking industry, which experienced technological disruption beginning around the 1850s, from the advent of the sewing machine. The good news is that total industry employment shifted, but didn’t shrink—the decline in artisanal boot-making jobs roughly equaled the increase in factory boot-making jobs

4. The (potential) bad news is that the shift in boot-making manufacturing and employment occurred over about a 50 year period. If AI brings much more rapid change, then productivity increases may be accompanied by much more pain in labor market transitions

5. Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen find that so far, AI hasn’t had broad-based employment effects, but employment for young people in AI-exposed occupations is 19% less than what it would have been if they were less exposed to AI. As the authors note, the question is whether reduced employment for subsets of 22-25 year olds is the canary in the coal mine

JMS Capital Group Wealth Services LLC

417 Thorn Street, Suite 300 | Sewickley, PA | 15143 | 412‐415‐1177 | jmscapitalgroup.com

An SEC‐registered investment advisor.

Rising Interest Rates

2026-08-21

The 30-year Treasury yield climbed to 5.31% on August 17th, which marked its highest level since June of 2007. Long-term interest rates have risen fairly steadily since the end of the Covid-induced recession:

Good News, (Potential) Bad News on the Economy

2026-06-05

The May jobs report was unexpectedly strong, as nonfarm payrolls grew 172,000, well above

Are There Rising Interest Rates on the Horizon?

2026-05-29

Although President Trump has been hectoring the Fed to lower the federal funds rate for quite some time

May Charts and Links

2026-05-15

Here are some of the writings that caught our attention this past month

The S&P 500 Has Reconcentrated

2026-05-11

For the past year or so we had seen a broadening of the bull market with respect to the S&P 500.

Iran Blockade… Two Weeks or Two Months?

2026-04-24

Last week, President Trump imposed a blockade on Iranian ports.

How High Can Oil Prices Go?

2026-04-06

As the Iran war has unfolded, oil prices have risen considerably.

All Quiet on the Fed Front

2026-03-19

As expected, the Fed left interest rates unchanged this week, at 3.50%-3.75%.