Weekly Compass | 09.18.26

Currents and Conditions

The Federal Reserve raised interest rates this week for the first time in three years, a quarter point move to a range of 3.75% to 4%. The hike itself was expected, but comments about persistent inflation, and a hint that another increase could come later this year, rattled markets. The S&P 500 and Nasdaq touched their lowest levels in over a month, bank stocks led the declines, and the 10-year Treasury yield climbed to its highest level since 2007.

In plain terms, borrowing got a little more expensive this week, and markets are adjusting. That is uncomfortable, but it is not a sign of a broken economy. Earnings remain healthy, employment remains resilient, and businesses are still investing. Higher rates are a headwind, not a wall.

The Winds of the Week

• The Fed's first rate hike in three years, with another possible before year-end.
• The 10-year Treasury yield at its highest since 2007.
• Bank stocks under pressure on tightening concerns.
• Oil prices up on overseas supply disruptions.
• AI and tech names showing pockets of strength, a sign this pullback is selective, not a broad panic.

Perspectives

When rates move, so does the temptation to react. The better question is whether anything has changed about why you invested in the first place.

Say you have $500,000 invested for a goal ten years out. A 5% pullback this week trims that by $25,000 on paper, which feels significant in the moment. But compounding at a long-term average equity return of around 8% a year, a single choppy month barely dents a ten-year goal. What matters most is staying invested through stretches like this one rather than stepping out and missing the recovery.

Quote of the Week

“Time is your friend; impulse is your enemy.”

-John Bogle, founder of Vanguard

Charting the Course

• Watching whether the Fed hikes again at its next meeting, and what that means for fixed income allocations.
• With yields this attractive, a good time to review whether cash and fixed income holdings are positioned to benefit.
• Year-end tax planning season is approaching. If we haven't discussed Roth conversions, tax-loss harvesting, or charitable giving for 2026, let's put it on the calendar.

Between the Tides of Our Local Community

Community Spotlight: Jacksonville

Fall is arriving quietly in Jacksonville this week, with cooler mornings, farmers markets back in full swing, and riverfront festivals filling the calendar now that the worst of summer heat has broken. A good reminder that seasons change on their own schedule, in markets and in life alike.

This newsletter is for informational purposes only and does not constitute investment advice. Please consult with your advisor before making any changes to your portfolio.