MacroSEP 18, 2026

Fed Hikes 25 bps to 3.75%–4.00%, Signals Another Move — Founder Marketing Budgets Feel It First

The FOMC voted 12-0 for its first hike since 2023, with 16 of 18 officials penciling in another. For 1-4 person shops on variable-rate credit, sales and marketing line items are the first to be re-underwritten.

BY KAI TRUSCOTT · MACRO & OPINION

The Federal Open Market Committee voted 12-0 on Wednesday to raise the federal funds target range by 25 basis points to 3.75%–4.00%, its first hike since July 2023, and 16 of 18 participants penciled in at least one more increase before year-end. Four expect two. Chair Kevin Warsh, per CNBC, said inflation has been “too high … for too long,” while Schwab’s Collin Martin noted Warsh’s characterization that the hike “removed a dose of accommodation” suggests he does not see policy as particularly restrictive.

Markets read the signal cleanly. Two-year Treasury yields touched 4.73%, their highest level since 2024, and the 10-year settled at 4.97%, according to Bloomberg. At Thursday’s open, chip and AI infrastructure names, Arm, Intel, Marvell, Corning, led equities higher on a Schwab note; the tape treated the decision as a Fed doing exactly what it had telegraphed, no more.

For founder-led businesses of one to four people, the mechanical effect arrives immediately. Every variable-rate SBA 7(a) loan, business line of credit, and credit card reprices this week. And with the dot plot placing another quarter point in December as the base case, the real question isn’t whether to cut discretionary spend, it’s which line items get re-underwritten first.

Sales and marketing is where that reckoning lands. It’s the largest discretionary block on most small-business P&Ls and the one most easily justified, or unjustified, on ROI grounds. Per-seat SaaS subscriptions, ad spend, and agency retainers now compete against a higher hurdle rate. Activity-metric tools (dashboards, sends, impressions) sit exposed. Pipeline-traceable tools survive.

There’s also no obvious relief coming from the AI vendor stack. CNN Business, citing Cleveland Fed President Beth Hammack and Minneapolis Fed President Neel Kashkari, reports growing concern inside the Fed that AI infrastructure demand is itself inflationary; Gartner pegs 2026 data-center spending at $1.37 trillion. Vendors absorbing those input costs aren’t about to discount their way out.

We flagged this scenario in our read on the August CPI print and what a 3.75% rate does to AI tool budgets. As of Wednesday, it isn’t a scenario. It’s the base case.

Sources

About the author

Kai Truscott

MACRO & OPINION

Kai Truscott writes the macro column for AI Sheet Report — capex cycles, hyperscaler spend, geopolitics of compute — and the occasional signed opinion piece. He is the only roster author who files opinion.