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It finally happened: The Fed declined to raise interest rates at its policy meeting for the first time since March 2022, Matt writes.

Why it matters: The last 15 months saw the sharpest series of rate hikes in 40 years — radically reshaping markets and the economy. Now, it might be the beginning of the end of that era.

A few ways the tighter money has rippled out into the system:

• Rising rates hammered the stock market in 2022, sending the S&P 500 down 19.4%, its worst year since 2008.
• Highly speculative, tech-centric growth companies — especially sensitive to interest rates — were clobbered, with the Nasdaq composite tumbling 33%.
• Mortgage rates soared from roughly 3% at the beginning of 2022, to more than 7% at times, drastically reducing affordability and slamming the brakes on home sales activity.
• Corporate borrowing costs skyrocketed, cutting off access to capital for riskier companies.
• The rate hikes triggered the failure of crypto hedge funds and supposedly safe "stablecoins," dominoes that ultimately toppled Sam Bankman-Fried's FTX into bankruptcy and criminal proceedings.
• Deposit rates rose sharply for savers.
• And some banks, like Silicon Valley Bank, found that their deposit base was far flightier than they thought, just as rising rates crushed the value of their bond investments. The result? A run on regional banks in March turned into the worst financial panic since the 2008 crisis.

What's next: It's unclear if all that interest-rate-related tumult is over.

• In announcing its decision not to lift rates for the 11th consecutive meeting, the Fed's rate-setting committee hastened to say it could return to rate hikes if inflation doesn't continue to drop.

What they're saying: More rate hikes still could be in the pipeline, but they may just come at a more leisurely cadence and modest size than those we've seen at each meeting since early 2022.

• "It may make sense for rates to move higher, but at a more moderate pace," Fed chair Jerome Powell told reporters at the post-decision news conference.

Worth noting: Despite such warnings, the stock market seems to be running with the idea that its long nightmare of rate hikes is over, as the S&P 500 inched up on Wednesday, closing at a new high for the year.

The big picture: The Fed's rate-hiking campaign — which pushed the Fed funds rate from around zero to more than 5% in less than a year and a half — was the sharpest, most sustained increase in rates in roughly 40 years.

Go deeper: The Fed grows confident its Goldilocks economy might come true

📉 China cuts rates following disappointing May data. (WSJ)

⚖️ Prosecutors will proceed with an FTX trial in October without pursuing 5 of 13 charges against Sam Bankman-Fried. (NYT)

🎶 17 music publishers sue Twitter alleging copyright infringement, and seeking $250 million. (Axios)

Commercial real estate could well be the next big shoe to drop, Axios' Felix Salmon writes.

• But even if it is, the systemic repercussions are likely to be small. That's the message being sent not only by Fed chair Jay Powell on Wednesday but also by New York City Comptroller Brad Lander.

Why it matters: Billions of dollars are tied up in commercial real estate, and much of that wealth could end up getting vaporized.

What they're saying: Powell downplayed concerns that a fall in commercial real estate values could constitute a systemic risk to the economy as a whole.

• Some banks more exposed to the sector "will experience larger losses," he said, but broadly the risk is "well-distributed" and the banking system is capable of absorbing the losses.

By the numbers: In terms of New York City property tax revenues, Lander limns four scenarios.

• His baseline forecast shows New York property tax revenues going up over the next three years, rising from $35 billion in 2024 to $37 billion in 2027. Even the "Doomsday" forecast, under which commercial property falls in value by 40% over six years, property taxes still rise in 2027 to $36 billion.
• That's a shortfall of $1.1 billion compared to the baseline forecast, but even that shortfall represents only 1.4% of city tax revenues. "It is well within the range in which tax revenues can ordinarily vary," writes Lander.

Between the lines: Property taxes aren't based on valuations, they're based on operating income. Because commercial real estate operates on very long leases, that operating income tends to change very slowly, and any concomitant change in tax revenues is similarly slow.

Be smart: When wealth gets wiped out, the damage to the economy is a direct function of the ability of the owners to withstand that drop.

• Commercial real estate owners are among the very richest people in America, and they can afford to see their equity wiped out.

The bottom line: If you own or have lent money against a lot of commercial real estate, especially in New York or San Francisco, there are a lot of reasons for you to be worried right now. If that doesn't describe you, however, there's no reason for you to be losing any sleep.

Executives' optimism about the future took a step down in the second quarter, according to a survey of chief financial officers out this morning from Deloitte, Emily writes.

Why it matters: The survey shows a wariness among execs, after having lived through the many gyrations of the past few years and as the future for financial conditions still looks fairly uncertain.

• To wit: The Fed's decision to take a wait-and-see approach to further rate hikes means there's a certain fogginess to the rest of the year.

By the numbers: Deloitte surveyed 122 CFOs in North America; 70% from public companies and the vast majority with more than $1 billion in revenue. 88% of those surveyed were in the U.S.

• Just 34% of chief financial officers rated current economic conditions as good or very good, down from 40% in the first quarter.
• Only 33% of CFOs said it's a good time to take risks, a drop from the previous quarter — though slightly above the lows hit last year when the stock market was in worse shape.
• 81% of CFOs put economic/financial market risks at the top of their list of external risks, followed by geopolitics at 57%.