UBS Unconcerned by Fed Hikes, Citing Historical Stock Resilience

By EC Assets · Published 17 September 2026

The Federal Reserve raised interest rates by 25 basis points on Wednesday. This move was widely expected by markets. The central bank signaled a more restrictive policy path than previously anticipated. UBS told investors not to fear the Federal Reserve's expected interest rate increase this week. History shows stocks tend to hold up once a tightening cycle begins. The Fed's 12-0 decision to raise rates signaled the central bank's alignment in tackling inflation. UBS Securities expects the Federal Reserve to raise its policy rate by 25 basis points on September 16. The firm anticipates another quarter-point increase in December. The latest "dot plot" will likely signal another hike later in 2026. A strong August jobs report boosted Fed rate-hike odds. This brought a range of trading opportunities across assets. An investment bank found that stocks in the energy and information technology sectors perform best one year after a Federal Reserve interest-rate hike. Shares and short-term yields edged up after the Fed hike. Focus now turns to the Bank of England. The Bank of England is set to defy the Fed's rate-hike lead. This comes despite rising inflation. Treasury yields moved lower after the Fed began its hiking cycle. Goldman's October hike call underscores renewed Fed tightening risks. The FTSE 100 gained after the Fed hike, with the Bank of England up next. This article is intended for informational purposes only. It does not constitute investment advice.