Fed officials are stepping in to calm a falling stock market, which is good for stocks right now but raises questions about what is cracking behind the scenes.

• Fed vice chair Williams said one more rate hike is likely enough this year and hinted at no hikes in 2027, and stocks bounced immediately.
• The timing is suspicious: his reassuring comments have landed twice now, both times on red days when the Nasdaq was sliding.
• Markets had been betting on three to six more hikes by next September, so this is a big shift in tone.
• Raising rates cannot fix the two things the Fed blames for inflation — AI spending and oil — because both are supply problems; it would mostly just kill jobs.
• The real worry may be credit: huge bond sales from SpaceX, Oracle and Broadcom are widening spreads, and private credit defaults look worse than expected.

Outlook: If the AI spending boom breaks, the story shifts from inflation to job losses, and the Fed looks ready to stop hiking before that happens.