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Fed rate hike: 3 views on what’s next

Sep 22, 2026 | Blog

If you’ve been watching the news lately, you’ve probably heard that the Federal Reserve raised interest rates. It’s the kind of headline that can feel unsettling but I want you to know: we’ve been watching this closely, and your financial plan is built for moments exactly like this one.

I’m sharing a perspective from Capital Group’s investment team that I think you’ll find helpful. Rather than noise, it offers clarity. Here are the three things that matter most right now:

1. The U.S. economy can handle higher rates: The U.S. economy, supported by a healthy labor market and rising productivity, can absorb modestly higher interest rates without derailing GDP growth. Viewed over a longer historical period, today’s rate levels are not unusual. What was unusual was the ultra-low rate environment we experienced post-global financial crisis and the government bond buying programs that held borrowing costs exceptionally low. In some respects, we appear to be on the path to normalcy after years of unorthodox monetary policy.

2. Dividend paying stocks have done well when rates rise: In a rising rate environment, shorter duration assets tend to do well, and many dividend-paying and value-oriented companies fit that description. By contrast, growth stocks that rely more heavily on future earnings can be more volatile when rates are rising. I am finding some of the most attractive opportunities in businesses with predictable cash flows that rely less on debt.

3. Fed hikes may help stabilize long-term interest rates: There’s plenty of evidence the U.S. economy is healthy and financial conditions are not strained. Employment is near full, equity prices are close to all-time highs, credit spreads remain tight, and deficits are elevated in the U.S. and across much of the world. The economy has absorbed higher rates without much pain.

We understand that headlines like this may feel uncertain and confusing. But it’s important to have people like us in your corner to stay educated and inform you. We encourage you to take a few minutes to read the full article here.

Everyone’s situation is different, and we want to make sure yours is getting the attention it deserves. If you need a second look at your portfolio Schedule your complimentary consultation to talk through what’s important to you!

We work with Altruist to bring you the best options for your future. Increasing interest rates are good for High Yielding Cash Accounts. We have one that pays 3.75% FDIC insured up to $3MM. Want to know more, reach out!

And as always, your weekly market update is here.

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