LIVE NOW: FOMC RATE DECISION & PRESS CONFERENCE JULY 2026
In a Nutshell
FOMC held rates steady at 3.75% with a 9-3 vote, triggering a market pullback as investors await new Fed Chair Kevin Warsh's press conference. The host closed all long positions for $8,900 profit and opened a short on Micron, now up $10,700, while cautioning beginners against shorting oversold stocks. Warsh's vague, optimistic tone and task-force approach signal a shift from Powell's direct style, with markets facing volatility ahead of earnings from Microsoft, Meta, and Robinhood.
These notes were generated by AI and may contain inaccuracies.
Ricky from TechBud Solutions is hosting a live stream covering the FOMC rate decision scheduled for July 2026. The Federal Reserve will announce their decision in the next 3 minutes, with a press conference following 30 minutes later. The stream aims to observe market reactions and identify potential trading opportunities.
For beginners carrying positions during highly anticipated rate decisions, there will be volatility. If feeling pressure or over-leveraged, it is recommended to reduce positions before the announcement. The advice emphasizes being safe rather than sorry during these events.
Semiconductor stocks are predominantly in the red before the announcement. SanDisk is down 4.4%, while Micron is leading the sell-off at 6% lower. A big volume spike occurs one minute before the report. A significant push occurs on Nasdaq right before the announcement.
The Federal Reserve maintained rates at 3.75% with no change. The decision represents a pause rather than a rate increase. After the announcement, the market begins to pull back despite the initial positive reaction on Nasdaq.
Positions are being trimmed in anticipation of volatility from the upcoming press conference. The decision was made to close out positions entirely, securing $8,900 in gains for the day. The strategy involves staying positioned to buy dips if markets pull back or add to positions if bullish sentiment emerges.
The press conference scheduled for 26 minutes after the rate decision will feature Kevin Warsh, the new head of the Federal Reserve replacing Jerome Powell. His tone (hawkish or dovish) will determine whether markets continue recovering or experience another leg down.
Shorting is discouraged for inexperienced traders during oversold conditions due to greater risk. The recommendation is to focus on identifying deals in quality companies rather than shorting during volatile market conditions.
Apple is the only Mag 7 company not heavily investing in AI, yet it remains the best performing Mag 7 stock. The company demonstrates consistent higher highs and higher lows with aggressive recoveries during pullbacks. Apple's P/E ratio stands at 41, revenue at $451 billion, and net income at $122 billion. There is 20% downside based on fair value analysis, with the company recently passing a $5 trillion market cap.
Coca-Cola represents a consistent value stock rather than a trendy growth play. From 2026 current highs, growth stands at 29% from lows at the start of 2026. The P/E ratio is 26.8 times earnings, revenue is $50 billion, and net income is $14 billion. The company makes more profit than many semiconductor stocks and Warren Buffett has invested in it.
SanDisk is down 50% from recent all-time highs of 2300 and 55% overall. This serves as a reminder not to be over-leveraged in companies experiencing elevated levels when corrections occur.
Broadcom has been trading sideways for the past month with fading lower highs and lower lows. The stock shows 17% upside potential with a P/E ratio of 61.7 times earnings. Revenue and net income are both strong. However, bear case concerns include gross margin decline of 230 basis points year-over-year and significant risk from top five customers representing 45% of total revenue. Any reduction in orders or architectural shifts by Google, Meta, or Apple could materially impair results.
A light position was established with 15 shares purchased, followed by an additional 10 shares at $765-766, bringing the total to 25 shares. The position represents less than 5% portfolio allocation to maintain light exposure during volatility.
Western Digital shows 4% upside with a P/E ratio of 26. The technical indicator signal is strong sell. The stock experienced extreme volatility with a 7.6% drop on July 27th and 7.7% drop on July 16th. Key risks include AI demand sustainability fears and the Chinese CXMT IPO launch representing competitive threat that could ease supply constraints and pressure pricing.
An additional 15 shares were purchased, bringing the total Micron position to 50 shares at lower prices. The strategy emphasizes keeping positions light while markets remain delicate.
AMD was discussed when trading at lows of 200 and has since doubled in price. Current concerns include elevated P/E ratios and market share losses. AMD trades at a trailing P/E ratio of 150 times EV over 999X, making it highly vulnerable to execution shortfalls. Gaming revenue is expected to decline more than 20% in H2 2026. Nvidia trades at 29 P/E ratio and is preferred over AMD due to superior competitive moat.
Meta owns significant revenue of $215 billion and net income of $70 billion. CapEx guidance was raised from $125-145 billion with full year cash flow potentially shrinking to $43 billion. The bear case centers on over-investment in AI and whether increased spending will pay off. The company has history of wasteful spending including the metaverse and Oculus goggles. The strategy involves trimming positions at elevated levels in preparation for corrections.
Google's recent earnings were the best ever but went negative in free cash flow for the first time in company history, resulting in a 3-4% sell-off in aftermarket trading. Similar concerns exist for Meta's upcoming earnings report regarding continued high spending levels.
Chairman Kevin Warsh delivered remarks following his second FOMC committee meeting. The committee voted 9 to 3 to maintain the target range for the federal funds rate at three and one-half to three and three-quarters percent. The committee is continuing its policy of making ample reserves in the banking system.
The economy is showing impressive resilience with positive trends and solid growth. Job gains have kept pace with the workforce and the unemployment rate has changed little. Inflation remains elevated relative to the committee's 2% goal. The committee remains resolute in delivering price stability.
The policy statement conveys just the facts and steers clear of forecasting, especially prudent at these uncertain times. Warsh emphasized that uncertainty does not mean a lack of clarity, stating there is no soft inflation target or soft implicit target. The target remains 2% and the committee will not waver.
Two economic developments were highlighted. The first is a very notable change since the last meeting 42 days ago. Nominal and real yields are materially higher across the Treasury curve. Some increases in market interest rates between FOMC meetings rank among the most significant in the last two decades, ranking around the top decile.
Market attention centered on real data and real economic developments during the intermeeting period. Prices reacted in real time to incoming information. The reduction in forward guidance may have been a factor, with market participants learning to play the ball, not the referee. Market prices will continue to respond in the direction and magnitude they see fit.
The second economic development noted is the strong growth of business investment. The surge in high-tech capex has been remarkable. In the AI-related category of high-tech equipment and software, the most recent data shows four-quarter growth rates of nearly 20%. This is helping to sustain the healthy momentum of manufacturing output.
Capex is preparing the ground for future growth, though the precise timing and magnitude of effects on the supply side remain hard to predict.
FOMC meetings produce policy decisions, but candid discussion of the big things that matter most is also a priority. Four questions were discussed:
- The implications of the past five years of high inflation on the current policy conjecture
- Economic shocks of recent years including strained supply chains, military conflicts, energy supply disruptions, substantial increases in tariff rates, and the surge in AI-related investment
- Price increases arising from shocks, including whether the business CapEx boom driving up prices of memory and logic chips indicates a broader inflationary dynamic
- Monetary policy tools and strategies, specifically how much accommodation is being provided by the balance sheet if interest rate policy is the primary monetary policy instrument
Markets have been reacting to events much more directly over the 42 days since the last meeting. This is considered a good development. Markets have seen a material tightening in both nominal and real rates even while the Fed has not changed policy in 42 days.
Interpreting markets is an imperfect business. The economy and output are solid with steady capex and products. The bond market appears to be signaling similar things, which is why tightening is occurring in both nominals and reals even without Fed action.
Three dissents were recorded. There was a lot more interaction among colleagues and a real family fight. There was large majority support for the decision, but the discussion was active and robust about the full range of what the committee can do and might want to do going forward.
The path to delivering on the Fed's remit requires delivering on price stability. The discussion was not inertial, and Warsh came out of the meeting confident in the team to win the battle against high inflation.
The decision not to move in July was not down to the cool CPI print for June. The committee is not relying on any one individual piece of data as cover or validation. The focus is on trends in the data rather than individual data points.
A task force has been called to revisit both private and public data used for decision making. The task force is doing their work with a check-in scheduled in the next couple of weeks.
The Fed funds rate is now about 75 basis points below the 2-year yield. Markets have moved up on what nominal rates are across the Treasury curve. Monetary policy matters by how it affects the real economy, and financial market prices represent one of the ways policy affects the real economy.
The 9-3 vote reflected a period of watchful thinking rather than watchful waiting. There was overwhelming agreement on objectives, authority, and commitment, with different leans on the answers to how best to achieve price stability.
Interest rates could well be part of the solution if inflation continues to be elevated, but not in isolation. Three prongs of strategy were outlined:
- Making clear that expectations are centered around the right number (2% inflation target)
- Demonstrating responsibility for delivering on the target without blaming others
- Using policy tools including interest rates
The committee will deliver on the 2% inflation target as the definition of price stability.
The committee is trying to understand and identify underlying inflation dynamics amid shocks. There have been a series of shocks hitting the economy including supply chain strains, military conflicts, energy disruptions, tariff increases, and AI investment surge.
The goal is to have growth that is broadening and inflation that is becoming more limited and circumscribed. The shocks make the policy job tougher, and the committee is trying to determine to what extent shocks are broadening in their effects on prices.
The decision was characterized as a rigorous review of the economic situation and the big hard questions, along with homework to resolve those questions going forward. Financial market prices did not pause during the intermeeting period - they reacted to inflation data and strong economic growth with nominal and real rates going up.
The Jackson Hole speech is being approached as a blank piece of paper. No judgments have been made yet on whether it will be a big picture speech or a more traditional setup for action between September and December.
Task forces are being checked in on between now and Jackson Hole. The principle is to find the best subject matter experts and put them together with people who might disagree with them.
Price stability and full employment are not at war with each other. There is no strict trade-off between the two parts of the mandate. Running a period of high variable inflation would do the most harm to labor markets.
Different tools work through different transmission mechanisms. Interest rates work through lending channels, credit channels, confidence channels, and foreign exchange. The balance sheet works through signaling and portfolio balance channels.
The mental model is not fine-tuning aggregate demand to catch supply. The focus is on getting supply and demand in broad order. There is a race between supply and demand, and the surge in business capex around AI is making that calculation harder to judge.
The Fed does not endorse any particular market move but observes them with keen interest. Surprise is not the objective function or what the Fed is solving for. The clear north star remains making the best decisions.
There was more uncertainty in the markets about what the Fed would do at this meeting. The question arises whether there is a point at which the Fed would not want to surprise the markets if they were pricing in something with higher certainty that was opposite of what the Fed intended to do.
A short position was opened on Micron after reaching overbought levels. The Nasdaq market is showing signs of an overbought reversal, suggesting potential sell-off opportunity for Micron. The position is up approximately $9,500. Shorting comes at greater risk, and this position choice does not constitute advice for others to short.
Kevin Warsh demonstrates a distinctly different approach compared to Jerome Powell. Powell was very straight to the point with no fluff, answering questions directly within his role. Warsh is not as direct, using word salads that don't answer questions and remaining very vague. This vagueness appears intentional to avoid creating market shocks.
Warsh seems very optimistic about achieving price stability and a strong labor market. His approach is non-traditional, and he has taskforces for all these issues. The question remains whether he is a genius doing something never done before or will make things worse by pursuing something so untraditional. There appears to be no middle ground in this assessment.
Warsh is aggressively optimistic about getting inflation and job stability under control. He believes he can convince other Fed members to adopt his thinking and approach. The effectiveness of this strategy will be determined in 6-12 months. The current mindset appears to be that no inflation and job stability is an option that is being chosen against.
Warsh seems much more willing to talk about the market in ways that Powell wasn't before. Previous approaches weren't being too effective, with the Federal Reserve potentially being too slow. The different tone and approach in managing himself and answering questions represents a significant shift in Fed communication style.
Being optimistic about anyone in leadership positions is important, giving them the chance to succeed or fail before making informed decisions about what to like or dislike. The FOMC rate decision was a pause with no rate hike. There was slight disagreement with nine voting in favor and three voting against.
Microsoft, Meta, and Robinhood report earnings after market close. The Nasdaq market is beginning to curl over. A small short position on Micron is up approximately $10,700. Beginners and those terrible at managing risk should stay in cash rather than shorting at technically oversold levels for bullish stocks. Shorting should be avoided by beginners.
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