Newsletter · 2026-09-15 · Ashutosh Agarwal

Wall Street's Deal Boom Runs Into an Expected Fed Rate Hike - The Capital-Markets Reopening - Week of September 15, 2026

The Capital-Markets Reopening for the week of September 15, 2026. Podcast synthesis on an expected Fed rate hike reshaping the reopening, Goldman's cross-asset sales head and Morgan Stanley's Mike Wilson saying the issuance machine is intact and a hike is survivable, Goldman topping global M&A league tables, OpenAI's banking AI tool built with Morgan Stanley and Evercore, the Nvidia-anchored Anthropic IPO, and Nasdaq's $100 million Payward investment.

The Capital-Markets Reopening

Week of September 15, 2026: Wall Street's Deal Boom Runs Into an Expected Fed Rate Hike

TL;DR

The story of the week is a plot twist in the macro backdrop: the Fed is now expected to raise interest rates on Wednesday. For months the whole reopening story rested on the idea that rates would eventually come down and cheap money would flood back into dealmaking. This week the script flipped. After a hot inflation report and an oil-price spike from the Iran conflict, markets have moved to "almost fully priced" for a quarter-point hike at the September 16–17 meeting (Bloomberg Daybreak, September 11). JPMorgan's David Kelly put the odds at roughly 92%, and Goldman's own trading floor pegged it at 84%, with a growing bet on a half-point of hikes before year-end (Notes on the Week Ahead, September 14; The Markets, September 11).
The reopening machinery, though, is still running full-tilt, and two of our names said so from the inside. Morgan Stanley's chief U.S. equity strategist Mike Wilson, an operator who runs the firm's market call, said flatly that "we're very prepared at Morgan Stanley" to take down another giant IPO, that high-grade bond issuance this month "could be another record" after records in June, July and August, and that "I don't see any real unwinding of that machinery yet" (Bloomberg Surveillance, September 9). Goldman confirmed the fee harvest is real: fresh league tables put Goldman #1 in global M&A, with about $1.4 trillion of deals and ~$3 billion of fees, up 33% year over year (Market Maker, September 14).
The biggest deal on the horizon got bigger, and stranger. Anthropic is now seeking to raise up to $100 billion at a ~$2 trillion valuation (the largest listing ever), and chip-maker Nvidia is in talks to anchor it with up to $10 billion (Elon Musk Podcast, September 14). That is a marquee fee event for Goldman and Morgan Stanley, the banks leading it, but a supplier bankrolling its own biggest customer is exactly the kind of circular-financing wrinkle that makes the AI-bubble worriers nervous.

What's new

Where the speaker actually runs the business being described, we flag them as an operator/insider; everyone else is an analyst, economist, journalist or commentator. Items are ranked by what's most useful for a trading book.

1. The rates door didn't open; it's swinging the other way. The Fed is expected to hike on Wednesday, and that changes the mood music for the whole reopening. This is the single most important development for our names, because every deal, IPO and bond is priced off the cost of money. Two clean explanations landed this week. On Bloomberg Daybreak, "Daybreak Weekend: Fed Decision, Sweden Election, BOJ Meeting" (September 11), Bloomberg Economics chief U.S. economist Anna Wong (economist) said "the markets have almost fully priced in a 25 basis point hike already," and made the wry point that new Fed chair Kevin Warsh has boxed himself in: he built his whole approach around listening to "unfiltered market signals," and now the market is telling him to hike two months before the midterms, against a president who wanted cuts. Her nuance worth keeping: the hot inflation number was driven by "a couple strange things": wireless cell-phone plans and an Airbnb pricing-policy shift, so the economic case is thinner than the headline, and she expects the Fed's own projections to show just "one hike in 2026" followed by cuts in 2027 and 2028. On Notes on the Week Ahead, "The Fed Paints itself into a Rate-Hiking Corner" (September 14), JPMorgan Asset Management's David Kelly (analyst, at a competitor) walked through the same logic and reached the same conclusion: a hike is coming, with market pricing near 92%. His numbers: oil (WTI crude) has jumped to $104 a barrel from $84 when the Fed last met on July 29, because the Iran war is choking Middle East energy exports; he now sees headline PCE inflation (the Fed's preferred gauge) running as high as 3.5% by December. But he stressed the other side too: wage growth was just 3.1% in August, "the weakest gain in any month since May of 2021," long-term inflation expectations are anchored at 2.36%, and he expects the economy to slow to 1.5–2% growth into 2027. Why it matters: the reopening is no longer happening out of an easing cycle; it's happening into a tightening one. Cheap financing was supposed to be the tailwind; now the wind is shifting.

2. Goldman's own trading floor: a hike is fine, even healthy, and the desk is busy. The best operator voice for our names this week came from inside Goldman's markets business. On The Markets, "What a Fed Rate Hike Could Mean for US Stocks" (September 11), John Sugar (operator/insider), Goldman's head of cross-asset sales within FICC and Equities (the desk that helps big investors trade across stocks, bonds, currencies and commodities), spoke from the Goldman trading floor. His read: "the market reaction is telling you that they're going to hike next week. We have something like 84% odds priced for that and for 50 bps before year-end." Counter-intuitively, he argued a hike is the safer path: "it's actually more dangerous not to hike because you might lose control of the back end", meaning if the Fed looks soft on inflation, longer-term bond yields could spiral, which "is one of the bigger risks to the market." On stocks he stayed firmly bullish: the S&P trades at a 19 price-to-earnings multiple ("that's the 10-year average"), second-quarter earnings grew "something like 30%," and "if you and I are sitting here at year-end... we're talking about an S&P that's probably well over 8,000." He described the AI companies at Goldman's just-finished Communicopia technology conference as unable to be "more bullish," and flagged near-term speed bumps: momentum has had "an extraordinarily tough last two months," with trend-following funds positioned against the market short-term. Why it matters: this is Goldman telling you its trading clients are active and it is not spooked by the hike, and an active client franchise heading into a Fed decision is exactly the backdrop that feeds FICC and equities trading revenue.

3. Morgan Stanley, from the inside: "we're very prepared" for the next mega-IPO, and the issuance machine isn't unwinding. The clearest Morgan Stanley franchise voice of the week. On Bloomberg Surveillance, "Bloomberg Surveillance TV: September 9th, 2026" (September 9), Morgan Stanley chief U.S. equity strategist Mike Wilson (operator/insider) was asked how ready Wall Street is to absorb "another monster IPO and maybe another one after that." His answer: "Well, we're very prepared at Morgan Stanley... and Wall Street as a body is very prepared for issuance right now. This has been the best year since 2021. I don't see any real unwinding of that machinery yet; these deals are being absorbed whether it's in credit or not." He said high-grade bond issuance this month "could be another record" following records in June, July and August, and that equity supply is likewise strong. The caveat he volunteered is the one worth writing down: "we are seeing a little bit of deterioration in the lower-quality issuers," so the market is "not as wide open perhaps as it was six, eight, twelve months ago," even though "we still have quite a bit of buying demand for new issuance." On rates, he was explicit that a rate hike would not "torpedo this"; his real worry is a 2027 story: if the Fed shrinks its balance sheet, that "could torpedo the absorption of all the issuance that's going on." Why it matters: the firm building its future on wealth and issuance is telling you the pipeline is intact and the hike is survivable, while quietly flagging that the lowest-quality corner is where cracks would show first.

4. OpenAI just pointed its newest model straight at the junior-banker job, and built it with Morgan Stanley and Evercore. A genuinely new franchise-and-technology story touching two of our names. On Elon Musk Podcast, "OpenAI automates junior investment banking tasks" (September 11), the hosts (commentators) detailed OpenAI's launch of ChatGPT for financial services, "developed directly alongside Morgan Stanley and Evercore as their primary design partners." Running on OpenAI's new GPT-6 "Astra" reasoning model, the tool automates the grunt work that fills a junior banker's first years: in one demo it picked peer companies for a merger target, pulled their live stock prices into a spreadsheet, checked the charts against the raw data, wrote a commentary explaining a recent sell-off, and "generated a fully formatted PowerPoint presentation in the exact style and template of the specific bank." The hosts noted the time compression: a task that takes a human analyst "three to six hours" now runs "in seconds", and that the system is wired directly into professional data vaults (LSEG, PitchBook, Crunchbase, S&P Global) so it grounds answers in verified figures rather than the open web. Why it matters: it is a concrete sign that Morgan Stanley and Evercore are shaping, not just buying, the AI tools that will reshape banking's cost structure. The bull reads it as a margin story (fewer hours, same fees); the bear asks how you train the next generation of senior bankers when the machine does the apprenticeship work.

5. The Anthropic mega-IPO got bigger, and Nvidia stepped in to anchor it. The freshest update on the biggest fee event in the pipeline, the one Goldman and Morgan Stanley are leading. On Elon Musk Podcast, "Nvidia anchors Anthropic's $2 trillion IPO" (September 14), the hosts (commentators) reported that Anthropic is "seeking to raise up to $100 billion in an IPO, valuing the company around $2 trillion," and that Nvidia "is in talks to be an anchor investor, putting in up to $10 billion." (An anchor investor commits money before the public roadshow to give other investors confidence.) They pegged Anthropic's annualized revenue at "$65 billion... a seven-fold jump from $9 billion just seven months prior." The catch the hosts hammered: Nvidia sells the chips Anthropic buys, so "the capital they put to the equity round essentially just round trips right back to their own revenue column", a supplier "buying guaranteed future revenue and calling it an equity investment," which leaves public investors to "parse out how much of this demand is organic versus how much is subsidized." Why it matters: for Goldman and Morgan Stanley this is the largest listing ever taking shape on their books. For the bears, Nvidia funding its own customer is a textbook example of the circular AI financing that makes them question whether the whole build-out is as solid as the headline numbers suggest.

6. Nasdaq put $100 million to work in crypto plumbing. A small but concrete item for one of our exchange names. On Daily Crypto News, "Sept 10: Wall Street Is Building on Crypto Rails" (September 10), the host (commentator) reported that "NASDAQ is investing $100 million in Kraken's parent company" (Payward), with the two "planning to deepen their partnership around tokenized equities and blockchain-based trading infrastructure", following Payward's work with the London Stock Exchange to bring big UK-listed stocks onto its tokenized platform. The same episode noted the 10-year Treasury yield climbing to about 4.87%, a reminder of the rate backdrop pressing on everything. Why it matters: it is a real, dated Nasdaq strategic move (not just a name-check in someone else's discussion), positioning the exchange for the tokenization wave, the long-run optionality on top of its core listings-and-data business.

The debate

The core question is the same one we've tracked all along: is this a durable, multi-year reopening of capital markets, or a fragile head-fake? This week the macro ground shifted under the debate, so both sides have new footing.

The durable case. The issuance engine is proven and it is not slowing. Morgan Stanley's own strategist says this is "the best year since 2021," the machinery isn't unwinding, and Wall Street is "very prepared" to take down the next monster IPO (Bloomberg Surveillance, September 9). High-grade bond issuance is on track for a fourth straight record month. Goldman is harvesting the fees: #1 in M&A, ~$3 billion of advisory fees, up a third from last year (Market Maker, September 14). The biggest listing in history, Anthropic, is getting bigger and pulling in blue-chip anchors (Elon Musk Podcast, September 14). And crucially, Goldman's own trader argues a rate hike is the healthy outcome (it keeps long-term yields under control), while the trading desk stays busy and bullish, with a year-end S&P target north of 8,000 (The Markets, September 11). A hike, remember, is not all bad for these firms: rising rates and the volatility around them are fuel for the trading businesses that Goldman and Morgan Stanley run.

The fragile case. The tailwind everyone was counting on just became a headwind. The reopening thesis quietly assumed the next Fed move was a cut; instead the market has forced a hike, and Goldman's desk is even pricing a half-point of tightening before year-end (The Markets, September 11). The 10-year Treasury yield is back up near 4.87% (Daily Crypto News, September 10), and an oil shock is pushing headline inflation toward 3.5% (Notes on the Week Ahead, September 14); higher financing costs land directly on the leveraged buyouts and debt deals the reopening needs. Even the bulls are hedging: Mike Wilson admits "a little bit of deterioration in the lower-quality issuers" and warns that a 2027 balance-sheet tightening could choke the market's ability to absorb all this supply (Bloomberg Surveillance, September 9). And the marquee deal that is supposed to crown the year now depends on Nvidia funding its own customer to get it done, the clearest sign yet of the circular AI financing the skeptics keep pointing to (Elon Musk Podcast, September 14).

My read. The split we've held sharpened again this week, but along a new fault line. The issuance-and-trading half of the reopening is not in question: the podcasts had two operators from our own names (Goldman's Sugar, Morgan Stanley's Wilson) telling you the pipeline is full, the deals are getting absorbed, and the desks are busy. What changed is the price of money. A reopening financed into a rate-cutting cycle is a very different animal from one financed into a rate-hiking cycle, and this week we learned we're in the second kind. That actually reinforces the posture we've favored all along: lean toward the diversified franchises (Goldman and Morgan Stanley) that get paid to underwrite and to trade, because a hike that pressures deal financing simultaneously feeds the trading floors. Be more cautious on the pure advisers (Evercore, Moelis), whose success fees depend on deals actually closing, and whose clients' math gets harder every time the cost of debt ticks up. The one date that matters now is Wednesday: not just whether the Fed hikes, but what its "dot plot" of projections signals about 2027. If Anna Wong is right that it's "one hike then cuts," the reopening keeps its footing. If the dots turn genuinely hawkish, the financing-dependent half of this market gets a real test.

Stocks in play

Goldman Sachs (GS). Bull: the most-covered of our names, and it looks strong. A fresh league table has Goldman #1 in global M&A with ~$1.4 trillion of deals and ~$3 billion of fees, up 33% year over year (Market Maker, September 14); its own FICC/equities desk describes an active client franchise and stays bullish into the Fed (The Markets, September 11); and its Communicopia technology conference was the venue where at least one new deal surfaced (Chime's $590 million purchase of Stride Bank) (Squawk on the Street, September 9). It also co-leads the Anthropic mega-IPO. Bear: the rate hike raises the cost of the leveraged deals that pad the fee pool; the Anthropic fee still depends on a clean listing at a stratospheric $2 trillion valuation. Catalyst / number to watch: Wednesday's FOMC decision and dot plot; Anthropic S-1/roadshow timing; whether Q4 trading revenue gets a lift from the rate-driven volatility.
Morgan Stanley (MS). Bull: a genuine operator voice this week: chief strategist Mike Wilson saying the firm is "very prepared" for the next giant IPO and the issuance machine isn't unwinding (Bloomberg Surveillance, September 9); a co-lead on Anthropic; and a design-partner seat shaping OpenAI's new banking AI tool, a potential cost-structure edge (Elon Musk Podcast, September 11). Bear: Wilson's own caveat: lower-quality issuers are softening, and a 2027 balance-sheet tightening is the real risk to absorbing all this supply; a slipped mega-IPO would sting the engine it's building. Catalyst / number to watch: the FOMC and its read-through to equity issuance appetite; wealth-management net-new-asset flows at the next print; any early revenue detail on the OpenAI/banking-AI partnership.
Intercontinental Exchange (ICE). Bull: structurally, ICE sits at the center of the listings, data and tokenization stories a reopening feeds. Bear: the higher long-end yield (10-year near 4.87%) keeps its mortgage-technology unit tied to a frozen housing market. Catalyst / number to watch: transaction-versus-recurring-data revenue mix; any update on its earlier crypto/tokenization initiatives.
Nasdaq (NDAQ). Bull: a concrete, dated strategic move: a $100 million investment in Kraken's parent Payward to build out tokenized-equities and blockchain trading infrastructure (Daily Crypto News, September 10); plus a steady drip of new listings filing on the exchange (wearables maker Oura filed its IPO on Nasdaq this week) (Run the Numbers, September 10). Bear: a $100 million crypto bet is optionality, not near-term earnings; the listings pipeline still leans heavily on a handful of giant AI names, so any AI-IPO wobble hits venue economics. Catalyst / number to watch: which venue the autumn AI mega-IPOs (Anthropic above all) choose; listings and market-data revenue trends.
Evercore (EVR). Bull: a better week than most for the boutique that rarely surfaces. Fresh fee-based league tables rank Evercore #4 by fee income even though it's only #9 by deal value, meaning it is winning the higher-margin advisory work rather than the biggest headline deals (Market Maker, September 14); and it earned a design-partner seat (with Morgan Stanley) on OpenAI's new banking AI tool, a notable vote of confidence in a small firm (Elon Musk Podcast, September 11). Bear: a pure adviser with no trading or lending cushion is the most exposed of our names to a rate hike that makes clients' deal math harder; success fees only land when deals close. Catalyst / number to watch: advisory backlog and managing-director productivity at the next print; any sign the sponsor-exit logjam is breaking now that deals are at least being attempted at scale.
Moelis (MC). Bull: the same pure-play advisory exposure, with valuable restructuring optionality if the rate hike and AI-debt strain ever tip borrowers into distress. Bear: with no trading or lending ballast at all, Moelis is the most rate-sensitive of the seven (a hiking Fed is the opposite of what a deal-fee-only model wants). Catalyst / number to watch: any shift in revenue mix toward restructuring; the first real sign of a sponsor-M&A thaw.
Jefferies (JEF). Bull: its leveraged-finance-plus-advisory mix gives it leverage to the record debt calendar, and its off-calendar fiscal quarter (ending in late August) usually makes it the group's earliest read on fees. Bear: it sits directly in the path of any AI-debt or lower-quality-issuer strain that a rate hike would aggravate, exactly the "deterioration in the lower-quality issuers" Mike Wilson flagged. Catalyst / number to watch: its next earnings report, expected in late September, the group's leading indicator.

Read-throughs

Macro / rates: the new master variable (GS / MS / JEF / EVR / MC). This is the week's dominant read-through and it touches everyone. A Fed hike into a reopening raises the cost of every leveraged deal and bond, and pushes the 10-year yield back near 4.87% (Daily Crypto News, September 10). The diversified franchises (GS, MS) get a partial offset (trading thrives on the volatility), while the pure advisers (EVR, MC) and leveraged-finance-heavy JEF feel the financing squeeze most directly. Watch the dot plot Wednesday: "one hike then cuts" (Bloomberg Daybreak, September 11) keeps the story intact; a hawkish surprise does not.
Investment-banking fee pool (GS / MS / JEF). Still the strongest structural signal: 2026 is "the best year since 2021," high-grade issuance is on a fourth straight record month, and Goldman is booking ~$3 billion of M&A fees, up 33% (Bloomberg Surveillance, September 9; Market Maker, September 14). The reopening's revenue engine is intact; the question is whether the higher cost of capital slows the top-of-funnel over the next quarter.
The Anthropic mega-IPO (GS / MS / NDAQ). The single largest fee event on the board is now targeting up to $100 billion raised at ~$2 trillion, with Nvidia anchoring up to $10 billion (Elon Musk Podcast, September 14). Goldman and Morgan Stanley lead it; whichever exchange wins the listing gets a marquee logo and years of data revenue. The Nvidia anchor is a double-edged sword: it de-risks the offering while feeding the circular-financing critique.
AI, automation and the cost of banking (MS / EVR). OpenAI's new banking tool, built with Morgan Stanley and Evercore, compresses hours of junior-analyst work into seconds (Elon Musk Podcast, September 11). Over time this is a margin story for the banks that adopt it fastest, and a seat at the design table is a competitive edge for the two names that have one.
Advisory and the boutiques (EVR / MC / JEF). A quieter week on live mandates, but a useful structural data point: fee-based league tables show boutiques like Evercore and Centerview punching above their deal-value weight (Evercore #4 by fees, #9 by deal value) (Market Maker, September 14). The pure advisers are winning high-margin work, but every one of them is now underwriting deal math against a higher cost of debt.
Exchange listings, data and tokenization (ICE / NDAQ). Nasdaq's $100 million Payward investment is the concrete move; both exchanges remain positioned for the tokenization wave, though this week's crypto-market-structure episodes were about the field generally rather than either company specifically (Daily Crypto News, September 10). Near term, plain old listings volume from the AI IPO wave is the bigger driver.
Named deals and filings this week. Chime's $590 million cash acquisition of Stride Bank, unveiled at Goldman's Communicopia conference (no advisor named; expected to close in the first half of 2027) (Squawk on the Street, September 9); Anthropic's expanded IPO (up to $100 billion raised, ~$2 trillion, Nvidia anchoring up to $10 billion) (Elon Musk Podcast, September 14); and wearables maker Oura's IPO filing on Nasdaq (Run the Numbers, September 10).

What changed vs. last week

Last week's issue (covering September 1–8) landed on a clear posture: the issuance-and-trading half of the reopening was firing on all cylinders, the sponsor-driven M&A half was the weak link (the $53 billion PayPal take-private had just collapsed), and the whole thing waited on the Fed, with Goldman's David Solomon on the record calling a 5.25% 30-year yield "fundamentals," not "a calamity." Here is what actually changed:

The rates story flipped from "waiting for the door to open" to "the door is swinging shut." Last week the debate was whether and when the Fed would cut. This week the market has forced an expected hike on Wednesday, driven by hot inflation and an oil shock (Bloomberg Daybreak, September 11; Notes on the Week Ahead, September 14). That is a real change to the thesis, not a nuance: the reopening is now happening into a tightening, not out of an easing.
But the reopening machinery held, and this week two operators said so directly. Where last week's best insider voice was Goldman's CEO, this week we got Goldman's FICC/equities desk (Sugar) and Morgan Stanley's chief strategist (Wilson) both saying the pipeline is full, deals are being absorbed, and a hike is survivable (The Markets, September 11; Bloomberg Surveillance, September 9). The engine is intact; the macro tailwind reversed.
Anthropic got bigger and picked up an anchor. Last week the story was the bank lineup ($15 billion pre-IPO facility, Goldman and Morgan Stanley leading). This week the raise ballooned to up to $100 billion at ~$2 trillion, with Nvidia in talks to anchor up to $10 billion (Elon Musk Podcast, September 14). Same lead banks, larger prize, and a new circular-financing wrinkle for the skeptics.
A brand-new angle: banking's own AI transformation, with two of our names inside it. Nothing like the OpenAI/Morgan Stanley/Evercore tie-up appeared last week; this is a fresh structural story about the cost of the business itself (Elon Musk Podcast, September 11).
Evercore quietly improved; Nasdaq got a concrete move. Last week Evercore surfaced only on the failed PayPal deal. This week it appears twice on constructive footing: top-five by fee income and an OpenAI design partner. Nasdaq, a name-check in a tokenization group last week, made an actual $100 million investment this week.