I would not expect a 50bp hike at this stage because that could create unnecessary pressure on economic growth and financial markets. A 25bp hike would be a more measured approach, while keeping the door open for the Fed to pause if inflation starts cooling again.
If the Fed hikes, my pick for the biggest short-term impact is 🤖 AI & tech stocks. Higher rates usually put pressure on high-valuation growth stocks because future earnings become less attractive when discounted at higher rates. I remain bullish on AI and the long-term trend, but I would rather see a pullback as an opportunity to accumulate gradually than chase prices higher.
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