In my view, continued rate hikes are still Wosh’s version of verbal tightening—namely, what’s often called expectation-management tightening.

Wosh releases the expectation of rate hikes, then uses those expectations to forcibly drive up the risk-free yield. In fact, the yield on 30-year U.S. Treasuries has been pushed up to around 5.19%, which has already helped the Federal Reserve achieve some of the macro effects of past rate hikes.
In addition, the current S&P and NASDAQ rely on expiry-date options and algorithmic hedging, and speculative fervor is extremely high. If rate hikes were to be carried out directly, it could easily trigger liquidity stampedes in financial assets—similar to those that were historically uncontrollable for the Federal Reserve. For details, refer to the crypto markets of 2021-2022.
If Wosh keeps releasing the ever-present “sword of Damocles” of possible further rate hikes, it will make reckless leveraged longs in derivatives more cautious; that’s essentially a way to grind away the market’s bubble at the lowest possible cost.
Moreover, the main drivers of this round of inflation are geopolitics and energy, so the pain-relieving effect of rate hikes will not be very obvious.
As of now, the U.S. stock market can still hold above the S&P 7300-7400 level. Large funds and institutions are still taking bets against the Federal Reserve, wagering that inflation in the third quarter will naturally fall back due to the energy base effect.
The next test for the market will be the CPI data for July and August.