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This is an abridged transcript of the podcast:
As widely expected, the Federal Open Market Committee reduced its benchmark interest rate by 25 basis points on Wednesday, its third straight cut, as the Federal Reserve’s monetary policy arm sought to balance its dual mandate of full employment and price stability. It appeared to see the risk to employment as the more pressing issue.
The policy easing brought the federal funds rate target range to 3.50%-3.75%, its lowest level in three years.
The decision showed an increased number of dissents, with three voting members disagreeing with the majority. Fed Governor Stephen Miran again preferred a 50-bp cut, while Kansas City Fed President Jeffrey Schmid again preferred to keep the rate unchanged. This time, Chicago Fed President Austan Goolsbee also preferred no rate change. The last time the FOMC had three dissents to a decision was in 2019.
The policymakers noted that economic activity has expanded at a moderate pace, but that job gains have slowed through 2025 and inflation has moved up and remains elevated. “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months,” the Fed’s statement said.
The FOMC issued a median federal funds rate projection of 3.4% at the end of 2026, indicating only one rate cut for the year, unchanged from its September Summary of Economic Projections. The range of estimates, though, widened to 2.1%-3.9% from the September projection of 2.6%-3.9%, signaling a broader range of views about the rate path next year.
The statement gave no indication of whether its next move would be a cut, a hike, or no change. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” it said in its standard Fed-speak.
Joseph Brusuelas, RSM U.S. principal and chief economist said of the meeting: “A very hawkish rate cut based on the statement and the summary of economic projections… Six members of the committee wanted no change based on the dot plots. The dot plot implies 1 rate cut next year with 7 indicating no change.”
Wall Street’s major averages advanced on Wednesday as the Federal Reserve announced its decision.
The benchmark S&P 500 (SP500) was +0.7% in afternoon trade, while the Nasdaq Composite (COMP:IND) was +0.4%, and the Dow (DJI) was +1.1%.
Over in the bond market, the 10-year Treasury yield (US10Y) was 2 basis points lower to 4.17%, while the shorter-end 2-year Treasury yield (US2Y) slipped 5 basis points to 3.58%.
On the tech side, Adobe (ADBE) +0.2% announced on Wednesday a partnership with OpenAI (OPENAI) to integrate its flagship creativity tools directly into ChatGPT.
At the sector level, industrials (XLI), consumer discretionary (XLY), and healthcare (XLV) are Wednesday’s top performers, while technology (XLK) is at the bottom.
On the economy, the U.S. Employment Cost Index rose less than expected in Q3, while wage growth eased, according to the Bureau of Labor Statistics.
YouTube (GOOG) (GOOGL) said on Wednesday it will launch TV plans with over 10 genre-specific packages early next year.
The company is notably launching a sports plan that will give users access to all the major broadcasters as well as sports networks like FS1 (FOX) (FOXA), NBC Sports Network (CMCSA), and all of the ESPN networks (DIS), as well as ESPN Unlimited.
The move by the world’s biggest video platform will further erode market share from traditional cable and broadcasters who are already seeing trends declining as consumers continue to switch to streaming.
Streaming continues to retain over 40% of all TV viewing in the U.S., according to Nielsen, with YouTube being in the lead as the most popular streaming platform.
Pricing for the TV plans was not disclosed.
Stock action for semiconductor firms and semiconductor equipment manufacturers demonstrated divergent action during trading on Wednesday during what has been a busy news week for the sectors.
Photronics (PLAB), which creates tools essential for the production of integrated circuits and flat panel displays, showed the most action. It had surged 40% by early afternoon trading, following its fourth quarter fiscal 2025 financial results. Meanwhile, ASML Holding (ASML) had declined 0.5% one day after a report surfaced that the Netherlands-based semiconductor equipment manufacturer had at least one customer with ties to the Chinese military. Applied Materials (AMAT) had inched up 0.6%, and KLA (KLAC) was relatively static.
Tech titan Nvidia (NVDA) shares were down 1% following a barrage of reports this week related to its recent U.S. approval to export its H200 chips to China. Competitors AMD (AMD) and Intel (INTC) had declined slightly by 0.7% and 0.5%, respectively. Intel is reportedly close to locking down a deal to acquire the artificial intelligence chip startup SambaNova Systems. Intel, AMD and Texas Instruments (TXN) were also named defendants in civil suits filed on behalf of Ukrainian citizens in a Texas court on Wednesday. Texas Instruments had inched up 0.1%.
Marvell Technology (MRVL) had increased 2.5% by afternoon trading after CEO Mark Murphy refuted reports that his company had recently lost business with Amazon (AMZN) and Microsoft (MSFT). Competitor Broadcom (AVGO) was static, while Qualcomm (QCOM) had edged up 1.8%.
In the memory sector, Micron Technology (MU) was up 2.5%. Rising demand for DRAM and NAND has led to nearly unanimous optimism around the stock, which has already more than tripled year to date. Seagate Technology (STX) had jumped 3.6%, and Western Digital (WDC) had climbed 4%.
During the 53rd annual Nasdaq Investor Conference on Tuesday, Western Digital’s CEO explained how data center buildouts have catapulted demand.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.