10-Year Yield Hits 19-Year High… And The Energy Outlook As Oil Surges 9/15/26

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Melissa Lee (1:02)

Live from the NASDAQ Market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. The Fed on deck. Markets waiting with bated breath for what's largely expected to be a rate hike tomorrow. What will that mean for stocks in the short term and through the end of the year? And our own Jim Framer speaking with NVIDIA CEO Jensen Huang this afternoon. We'll hear what he has to say about the rising risks in the AI trade. Plus, Goldman Sachs nears an inflection point. Energy prices hit new four-month highs and no clarity for crypto. Bitcoin dropping even before a key regulation bill got stopped by the Senate. All the details and what it means for the trade. I'm Melissa Lee, come to you live from Studio B at the NASDAQ. On the desk tonight, Karen Feinerman, Dan Nathan, Guy Adami and Laurie Calvicina, head of US Equity Strategy at RBC Capital Markets. Welcome to you, Laurie. And we start off with a countdown to what might be the most closely watched Fed meeting of the year. Odds the central bank raises. Rates tomorrow currently stand at close to 95%.

Treasury yields rising and once again yields, I should say rising once again today, ahead of the decision. The 10-year hitting a high last seed in 2007, but even with near certainty about what the Fed will do, there's plenty of uncertainty for stocks. All major indices in the red for the sixth time in seven sessions and Wells Fargo cut its year-end target for the S&P to 7,700 from 7,950. So how should we expect markets to react tomorrow?

95% on the hike, but who knows what gets said at that press conference?

Guy Adami (2:28)

I think it's what's said is what's going to be important. And you know, is this beginning of a rate hike cycle? Is this a tweak? We had that conversation. I'm sure Lori has some views.

I actually think it might be a relief rally on the back of it, quite frankly. In other words, 95%, it's a near certainty that this is going to happen. We had a conversation last night. The Fed doesn't like to disappoint when it's over 60% probability, and yet here we are. So I think the bond market could actually rally on a hike. The problem is, I think this will be somewhat short-lived. Rates are going higher globally, they can continue to go higher here, and that's deleterious, I still believe, to the stock market.

Melissa Lee (3:02)

What do you think, Lori?

Laurie Calvicina (3:03)

So, you know, I think there's a Fed conversation and a 10-year yield conversation. And as, you know, we sort of have talked internally, our rate strategist, he had not been looking for hikes, but now he's looking for three through year-end. So, you know, you've seen a lot of people around the streets sort of circle the wagons, adjust their expectations.

My modeling at the end of the day says a couple of hikes and 10-year yields at 5%, we can handle that given the strength of the earnings environment we're in. But when you start talking about 10-year yields at 5.5% or more like six hikes, when you get into that zone, you start to eke away at those forward returns. So to me, it's not so much do we get the hike or not. I'm really going to be watching the 10-year.

Dan Nathan (3:42)

Going back to 2024, and I know there's been a lot of conversation about, is it political, is it not political, depending upon what they do. Obviously, there's no chance of a rate cut, and that's something that the administration would love to see. They talk about it quite often. But in September 24, our Fed Chair Powell, who is kind of under siege, not really, because the administration then was the Biden administration, he cut 50 basis points two months before the election. They were not particularly worried about inflation, was coming the way in which they wanted to, but they're worried about the labor market. Now, flash forward here is like they told us, or worse told us in August, they're not worried about the labor market, but they are worried about inflation going the opposite way. So to me, I just think that yeah, you had a president there that was perfectly happy with a cut into the election, and now you have a president here that wants a cut into the election, but is not gonna get it. And I just think of all that happened last year with the administration and what they were doing to politicize this process. I mean, I'm shocked, to be frank, that we have a 95% probability of a hike right here, because we know what might happen. We know how quickly a tweet is going to come out. And so one way or another, you just can't, if you're Warsh and given the guidance that he is given about communication, this doesn't help their cause. And we also know that Besson and Warsh, there's been a lot written about it, have a very close relationship. Besson has been proven to really toe the party line. He knows better as far as from a financial situation, from a market situation. He probably knows that they should not cut interest rates, but that's not what's coming from the boss here. So at the end of the day, I just find it fascinating. I'm shocked that it's 95% or something like that, because it doesn't make a lot of sense for them right now to be hiking, in my opinion. But again, I don't make decisions. I just sit here and talk to you guys.