Fed's Dot Plot Shift and My Tech Watchlist
Watching the Fed's latest dot plot has been pretty interesting, especially the subtle but meaningful shift in the median longer-run rate. It’s not a huge jump, but the move from 2.5% to 2.8% for 2025 and even nudging 2026 up a bit speaks volumes about their assessment of persistent inflation pressures and the 'higher for longer' narrative gaining traction.
This makes me re-evaluate some of the growth names on my watchlist. Companies like $ADBE, trading at 257.49 today, or even $RBLX at 37, rely heavily on future earnings growth being discounted back. A higher discount rate, even if incremental, means those future earnings are worth less today. It's not a sell signal for everything, but it certainly prompts a closer look at valuations and balance sheet strength. I'm focusing on those with robust free cash flow and a clear path to profitability, rather than just pure top-line growth. It feels like the market is still digesting this, and there might be some volatility ahead as the implications fully sink in.
I'm with you on this. The shift, while seemingly small, really reinforces the idea that we can't expect a quick return to the lower rate environment we've seen in the past. It will be interesting to see how this plays out for growth stocks.