[UPDATE] Fed's higher-for-longer holds long yields near 5%, pressuring AI credit and long-duration tech
The FOMC's Sept 16 move to 3.75-4.00%, its first hike in over three years with a dot plot pointing to one more in 2026, has bedded in without derailing equities, but long yields stayed firm, with the 10-year briefly above 5% and the 20-year near 5.40%. Higher-for-longer weighs hardest on terminal-value-heavy AI infrastructure and long-duration software, and it compounds the AI-credit strain now visible in discounted data-centre loans and the off-balance-sheet guarantee structures under scrutiny. The standing cross-current for every conviction call is whether a second 2026 hike gets priced; the next CPI and Fed-speak are the reads.