No Fed rate hike is likely in September, which is good news for stocks and for anyone worried about borrowing costs going higher.

• Treasury Secretary Bessent signaled you don't raise rates during a supply shock unless the damage spreads, and it hasn't yet.
• Inflation is being pushed up by oil, tariffs, and shortages of things like power equipment and memory chips, but those may fade within a year and a half.
• The economy is running hot: third-quarter growth is tracking above 4% as people save less, spend more, and companies pour money into AI.
• AI is starting to cut costs too — SAP said it is slowing hiring because AI made its developers 30% more productive.
• The risk is the borrowing behind the AI buildout, which is boosting growth now but sets up a blow-up later.

Outlook: Markets still price a coin-flip chance of a September hike, so stocks could rally as that fear fades, with cybersecurity and software the favored bets.