After more than a year of expected monetary policy easing, this afternoon is decision day. The Federal Reserve will issue its FOMC statement at 2:00 p.m. today.
The media teased markets with the idea of a 50 bps cut. A few U.S. Senators even wrote a letter to ask for a 75 bps rate cut.
Since markets expected the cut for so long and it priced in already, Fed Chair Powell’s question and answer session at 2:30 p.m. will have a strong impact on markets. In particular, the most expensive markets like technology will move the most. Watch Nvidia (NVDA), Broadcom (AVGO), Texas Instruments (TXN), and Micron Technology (MU) today.
The most interest rate-sensitive sectors will have a meaningful impact on the gold, silver, and oil and gas sectors. Exxon Mobil (XOM) already bounced back by $4.00 to close at $114.18, ahead of this meeting. Barrick Gold (GOLD) is around 3% below its high for the year, closing at $20.48.
Lithium mining firms like Albemarle (ALB) may join the basic materials rally. However, lithium prices will not fall unless more firms drastically slash output.
The short-float on ALB stock is 10.14%. In the last week, traders bet on smaller firms like Sibayne Stillwater (SBSW) instead. The stock is up by 33.65% in the last week.
