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Posted September 16, 2026 at 12:29 pm
Scott Bauer joins Jeff Praissman to break down the market forces extending beyond the Fed’s latest rate decision. They discuss interest rates, oil prices, inflation, AI concerns, economic data, and what investors may be watching for in the Fed’s outlook for the months ahead.
The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.
Hi, everyone. This is Jeff Praissman with Interactive Brokers, and it’s my pleasure to welcome back to our podcast studio Scott Bauer from Prosper Trading Academy. Hey, Scott. How are you?
Jeff, I am great. How are you?
I’m good. And for our listeners, Scott is a frequent guest at the IBKR Podcast Studio. He comes in usually every other Wednesday, talk about the market. You can find more from Scott on our website under education and also on prospertrading.com as well. But, let’s kick this off, Scott, ’cause we got… It’s a Wednesday morning and, you know..
Think there’s anything going on?
I heard something at 2:00 might be going on. I don’t know. Maybe something. I don’t know. Maybe some soap operas, Price Is Right. I don’t know. But yeah, so obviously the Fed decision’s a big item that, you know, full disclosure, this is being recorded before that’s been announced, so. We’re just gonna kind of discuss, start off with last week. You know, oil prices surged again, while Treasury, you know, yields climbed and these major stock indexes also, they finished lower. So Scott, was this primarily like an energy-driven sell-off, or do investors just fundamentally reassessing the outlook for inflation and interest rates at this point?
Yeah, I think it’s a little bit of a combination between energy and interest rates. If I had to give it a percentage, I’d probably say 70% interest rates, 30% energy. But, you know, when you look at the correlation between oil prices and the equities and/or interest rates and the equities, very tight correlation these days, right? So, I would say that those two things are absolutely driving the equity markets here. Now, let’s just play this out. If, let’s say we were to get a resolution in the Mideast, you know, with Iran and oil prices drop. Does that mean immediately we’d see the market react positively and higher? Probably, but in my opinion, not as much as if, let’s say the Fed comes out and they say, “We’re not raising rates, and we see inflation just sta- you know, it’s going down,” blah, blah, blah, blah. That to me would have more of an impact on the markets.
Even with that sell-off, you know, stocks did rebound on Friday a little bit, after those several consecutive declines.
Kind of short recovery signal, was that renewed confidence or was it just investors kind of repositioning ahead of this week’s Fed, you know, meeting, today’s Fed meeting actually?
You know, it was a little repositioning, but you gotta remember last weekend after that recovery on Friday, all that news came out about AI, right? That was after the market closed on Friday. Had we not gotten that news, my guess is the markets probably would’ve just held those gains. Maybe not, you know, gained more than that. So, you know, we talked about rates, we talked about inflation, we talked about energy, but now the AI story, you know, is there again, kind of putting that risk-off mode back into the markets a little bit.
You know, circling back to obviously, you know, today’s decision announcement, you know, like prediction markets have it at like over 90% that it’s gonna go up. I mean, again, we don’t know. But, besides the decision itself, ’cause that is what it is, but after the decision, what should investors listen for, you know, in the statement?
Like, are there, They should look for economic projections, you know, and also like the press conference, right? There’s so much like data upon data and like maybe kind of hidden nuances.
Oh, yeah.
..For these, you know, for investors to really kind of listen to besides for just the number.
Well, I think the algos and the HFTs are gonna know what to listen for, specific words, specific inflection from Warsh. Yeah, we’re gonna get a raise today most likely, but more importantly is what he says about October, December, going into next year, because all of a sudden now, the possibility or probability of an October hike in addition to today is upwards of about 45%.
So it is definitely going to be what he says. And, also I think what’s gonna be very important is how is the entire committee gonna vote on this? If it’s a unanimous vote and you’ve got some of the FOMC members from last time that were not in favor of a hike, if they’re now in favor, that could lean this a little bit more hawkish.
Besides today, which is obviously big news, but there’s always data, right? We always– You and I always talk about this. I mean, Thursday we have housing starts, building permits, jobless claims, and, you know, regional manufacturing jobs. So how could these reports, could they reinforce this economic resilience, or could they, you know, sort of begin to reveal more visible pressures from potentially higher borrowing costs?
Sure, and that’s should be reflected in some of the housing data, I would think. Even though the housing data is old, right? It’s in the rear view mirror. That’s still as rates were moving higher. I just saw this morning that 30-year rates are now back over 7%. That’s not gonna be reflected in tomorrow’s data, but certainly moving forward. So I think we’re gonna see some weak housing numbers, which could impact the market negatively. But it’s a matter at this point is how much is the market already pricing in maybe some of this weak economic data?
Scott, this has been great as always. Appreciate you coming by. And again, for our listeners, you can find more from Scott on our website, interactivebrokers.com under Education, Podcasts, Webinars, Articles, as well as prospertrading.com. Until next time, Scott.
Jeff, really appreciate it. Have a good one.
All right. Sounds good.
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