What I Talk About When I Talk About Money

The Merchant of Rates and the Prize of Stability

On this day in 1896, a man named Alfred Nobel passed away in Italy. Most people know him today for the prestigious prizes awarded in his name—ceremonies that, by tradition, take place every year on December 10th.

But the origin of this day is rooted in a mistake. Years before his death, a newspaper erroneously published Alfred’s obituary. The headline read, “The Merchant of Death is Dead,” condemning him for his invention of dynamite. Horrified that he would be remembered solely for destruction, Nobel rewrote his will, dedicating his vast fortune to celebrating those who conferred the “greatest benefit to humankind.” He literally paid to change his legacy.

Today, the Federal Reserve faces a similar, albeit less explosive, challenge. They are trying to rewrite the economic narrative. Will they be remembered as the architects of a “Soft Landing”—a prize-worthy feat of monetary engineering—or will history judge them for holding on too long, or letting go too soon?

As the market waits for the 2:00 PM (EST) announcement, the air is thick with the kind of tension usually reserved for a Stockholm banquet hall.

1. The Pre-Ceremony Jitters

The market is already pacing the floor. Volatility has kicked in early.

• The Indices: The S&P 500 and Nasdaq are wobbling, caught in a “wait and see” chop. The Russell 2000 is down slightly.
• The Fear Gauge: The VIX has jumped to 17.75, signaling that traders are hedging their bets.
• The Bond Warning: Despite the near-certainty of a rate cut today, the 10-Year Treasury Yield is stubbornly high at 4.19%. The bond market is effectively writing a preemptive obituary for the Fed’s fight against inflation, warning that the “mission accomplished” banner might be premature.

2. The Main Event: A Hawkish Cut?

At 2:00 PM EST (11:00 AM PST), the Fed is expected to cut rates by 25 basis points. The market has priced this in with 90% certainty. The drama isn’t about today’s cut; it’s about the Dot Plot for 2026.

• The Fear: The market earlier expected three cuts in 2026. Now, the fear is that the “dots” will show only two—or even one. This would be a “Hawkish Cut”: giving us the candy today but promising a diet tomorrow.
• The “Split” Decision: Watch for dissent. With inflation sticky and the labor market cooling (but not freezing), the Fed members are divided. A split vote on the Dot Plot would reveal just how fragile the consensus really is.

3. The Tech Sector: Smugglers and Cloud Wars

While the Fed prepares its statement, the tech sector is dealing with its own drama.

• Nvidia & The Smugglers: Reports confirm that the Chinese AI firm DeepSeek built its next-gen model using smuggled Nvidia chips. It’s a stark reminder: bans or no bans, the demand for top-tier compute is like water—it finds a crack. Meanwhile, the U.S. government has officially greenlit the export of the H200 chip to China, acknowledging that it’s better to control the flow than to lose the market entirely.
• Microsoft’s Stumble: Microsoft is down ~1.7% today. The culprit seems to be a report from Cleveland Research suggesting Azure cloud growth is coming in softer than expected. In a market priced for perfection, “soft” is a dirty word.
• The Palantir Win: On the flip side, Palantir is up after securing a massive contract with the U.S. Navy to overhaul their supply chain with AI.

4. The Commodities: The Silent Rally

Amidst the tech noise, something historic happened in the quiet corner of the commodities market.

Silver broke the $60/oz barrier for the first time in history.

While Gold gets the headlines, Silver is surging on a “double engine”: monetary demand (Fed cuts) and industrial demand (AI data centers and solar panels need silver). It has doubled in value this year alone, quietly outperforming almost everything else.

Conclusion: Rewriting the Will

Alfred Nobel managed to change his story. He went from the “Merchant of Death” to the patron saint of peace and science. We can’t control the first draft of history—people will think what they want. But like Nobel, we have the power to rewrite the ending. The legacy isn’t what you did yesterday; it’s what you choose to fund today.

Today, Jerome Powell and the Fed have the same opportunity. If they navigate this meeting correctly—cutting rates without reigniting inflation, signaling caution without causing panic—they might just pull off the economic equivalent of a Peace Prize.

But if they miss? Well, the market has its own way of writing obituaries, and it rarely waits for the ink to dry.

Disclaimer: This is not financial advice. I am just a writer watching the ceremony from the cheap seats. Do your own research.