I’m voting C. Whether the Fed hikes once more matters less to me than how long rates stay elevated.
If “higher for longer” becomes firmly priced in, I’d watch Treasuries most closely. Long yields near 5% affect almost everything else: equity valuations, borrowing costs, the dollar and even gold’s opportunity cost.
Stocks can still rally if earnings and AI growth remain strong, as we saw after the September hike. But persistently high long-term yields would keep pressure on expensive growth stocks.
So for me: watch the bond market first, then see how equities react.
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