Tom Lee's September Fed Bet: Up With a Hike, Up More With a Hold
Thomas Lee, Managing Partner and Head of Research at Fundstrat Global Advisors, argued in a macro strategy note dated September 14, 2026 that U.S. stocks would rise with a 25-basis-point hike at the September Fed decision and rally more if the Federal Reserve holds rates. A basis point is one-hundredth of a percentage point, so 25 is a quarter point. Fundstrat
The note, authored by Thomas Lee, CFA, frames September as a two-way upside setup for stocks. In Lee's scenario, a 25-basis-point increase still leaves stocks higher. A hold leaves more room for multiple expansion, when investors pay more for each dollar of earnings, and for position rebuilding, when funds put cash back to work.
Lee previewed that view on CNBC in late August and early September. An August 31 interview was titled "The markets could rally 'very strongly' if the Fed holds rates in September: Fundstrat's Tom Lee" and a September 1 Closing Bell segment was titled "Tom Lee: September is set up to be a strong month for stocks." CNBC On September 8, Lee said the Fed meeting could trigger a very big rally in stocks. CNBC
The baseline entering that call was steady rates. In its June 17, 2026 statement, the Federal Reserve decided to maintain the target range for the federal funds rate, the overnight rate banks charge each other, at 3-1/2 to 3-3/4 percent. Federal Reserve For the June 16-17 meeting, the Federal Reserve voted unanimously to maintain interest on reserve balances, the rate paid on money banks keep at the Fed, at 3.65 percent, effective June 18, 2026. For the July meeting, it voted unanimously to maintain that rate at 3.65 percent, effective July 30, 2026.
Lee saw a hold as the most likely Fed move ahead of the July 2026 meeting. Federal Reserve Chairman Warsh said "inflation is a choice." Both comments were reported in CNBC's July 29 live coverage of the Fed meeting. CNBC
The FOMC holds eight regularly scheduled meetings, and the Federal Reserve's 2026 calendar lists September meetings. Federal Reserve
The broader context here is the sequencing problem for rate-sensitive investors. Two unanimous votes to leave rates unchanged shrink the room for a surprise cut. Lee's framing keeps the risk of a hike contained by treating it as confirmation rather than shock. That distinction affects hedge ratios and how funds time cash into the decision. This is one analyst's forecast, not what markets have settled.
Looking at what this means for positioning, the hold does heavier lifting in Lee's construction. A hold supports bonds and growth valuations without forcing a repricing of the gap between the funds range and interest on reserves. A hike still permits a gain in his framework, through steady earnings and removal of uncertainty rather than easier conditions. For savers, borrowers and everyday investors, the caution is that statement language and the dots, the Fed's projections for future rates, can sound hawkish or dovish without a rate change, and traders risk misreading that mix as a clean signal.
