Fed delivers its first hike in 3 years. Plus, what’s moving Starbucks and GE Vernova

Fed delivers its first hike in 3 years. Plus, what's moving Starbucks and GE Vernova. The S & P 500 fell after the Federal Reserve raised interest rates by 25 basis points , the first hike in overnight borrowing costs in more than three years.

What happened

The Fed said in its policy statement that the rate hike "will support a timelier return" to the central bank's policymaking committee's 2% inflation target. The nation's inflation rate has been running hotter than 2% for many years. During his post-meeting news conference, Fed Chairman Kevin Warsh said that "inflation is too high and has been for too long," adding that Wednesday's rate hike reflects the central bank's commitment to reducing inflation. Starbucks is considering selling a majority stake in its Japan operations in a deal that would value the business at about $3 billion, according to a report from Reuters.

Japan is Starbucks' largest international company-operated market — with 1,883 stores at the end of last fiscal year — and was called as a source of strength in the company's July earnings call. Even though the region is performing well, Japan is viewed as a non-core market and a stake sale would be a continuation of an asset-light licensing model that got started in April, when CEO Brian Niccol sold a stake in Starbucks' China business and formed a joint venture with Boyu Capital.

Shares of Starbucks are slightly higher Wednesday afternoon; at their highs of the day, before the Fed decision, the stock was up about 1.

The wider picture

GE Vernova is one of the biggest gainers in the portfolio on Wednesday, up more than 4%, after CEO Scott Strazik gave a bullish presentation at the Morgan Stanley Laguna Conference. " Since Vernova's July earnings call, Strazik said the company has agreed to multiple slot reservations for 2032 deliveries, an encouraging sign of the durability of demand for its supply-constrained turbines. While there have been questions about how long Vernova can maintain pricing power as the company adds manufacturing capacity, Strazik said new turbine supply that became available this summer for 2030 and 2031 delivery has seen a "very strong market response. . . at premium pricing.

" All 12 gigawatts of new supply for those two years "is in some form of contracting," he said. Vernova plans to hold an investor day next year where it will set its 2030 financial outlook, Strazik said. Some of that optimism likely stems from the growth of Vernova's services business, which covers repairs and other maintenance once turbines are installed by customers. The Fed’s policy-making committee was unanimous in its decision to hike, but forward guidance was split.

ByMichael RaceBusiness reporter, Reporting fromWashington DCPublished16 September 2026, 22:02 BSTUpdated 1 hour agoUS interest rates have been raised for the first time in more than three years and could be increased further in a bid to slow rising prices.

What has been reported

Warsh noted that US inflation has been above the target "for more than five years". Asked on Wednesday about the message the rate hike sent to Trump, Warsh chuckled before saying: "I have got nothing for you on a discussion with the president. "The Fed's hike is the first rate move in any direction since they were cut in December 2025. Warsh declined to provide his own view on where he saw the Fed's rates going, but the majority of his fellow policymakers said they believe rates would be hiked again before the end of this year to between 4-4.

The forecast suggested price rises will ease in the coming years, with inflation, the measure used to assess the cost of living, predicted to fall steadily to the Fed's target by 2029. Every weekday, the Investing Club releases the Homestretch; an actionable afternoon update just in time for the last hour of trading. Based on the updated "dot plots" in the Fed's quarterly Summary of Economic Projections, most central bankers expect one more rate increase before the end of the year.

S. economy appears to be strengthening but faces headwinds from geopolitical uncertainty.

What happens next

We first heard this back in June from Bloomberg. What's different now is that Bloomberg reported the business could be valued at $2. 5 billion, so we like the slightly upgraded terms. A deal for its Japan operations will keep the company focused on its U. S. turnaround while providing a cash infusion it can use to invest in stores and technology, repay debt, or even repurchase stock. It's a much-needed jolt for shares of the gas turbine maker, which entered Wednesday down almost 20% since mid-August, as concerns mounted around the sustainability of the artificial intelligence buildout.

Here are some of the most important comments from the CEO.

The report has been compiled by The Daily Waves using information reported across cnbc.com, marketwatch.com, bbc.co.uk. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.