Market Note · Sep 3, 2026

The Fed Isn't Giving Hints — Or Is It?

A voting Fed governor just gave investors a clearer look at the September rate debate — without the Fed chair making a promise.

Fed Chair Kevin Warsh has made it clear that he doesn't want the Federal Reserve telegraphing its next move to Wall Street. Investors are supposed to watch the economy and the data instead of waiting for the chairman to tell them what's coming. Fair enough. But this week, Wall Street may have gotten a pretty good hint anyway.

Federal Reserve Governor Christopher Waller said he may support keeping rates unchanged at the September meeting if the next inflation report confirms that price pressures are cooling. That matters because Waller is not an outside economist. He sits on the Federal Reserve Board of Governors and votes on the FOMC. When the committee meets September 15-16, Waller gets a vote.

The federal-funds target currently stands at 3.50%-3.75%. Headline PCE inflation is around 3.7%, with core PCE near 3.3%. Inflation is still above the Fed's 2% goal, but the direction has improved enough to give policymakers a reason to wait rather than automatically reach for another hike.

Waller wasn't announcing a Fed decision or speaking for the entire committee. He was doing something more useful for investors: telling us what could determine his own vote.

The Fed Has Room To Wait

The economy is still holding together. GDP grew at a 1.8% annual rate during the first half of 2026, unemployment stood at 4.1% in July, and layoffs remained relatively low. Waller described the labor market as being in “satisfactory shape.” In plain English, the Fed is not being forced into an immediate move by a recession or a collapsing job market.

AI Adds Another Wrinkle

Billions continue pouring into data centers, computing equipment and AI infrastructure. That spending is supporting growth and could eventually lift productivity, but it also creates huge demand for electricity, equipment and capital. That gives the Fed another inflation variable to watch.

Wall Street certainly understood the message. Expectations for another September increase fell, Treasury yields moved lower and stocks took off. The Dow jumped more than 600 points, while the S&P 500 gained roughly 1.15%. Investors weren't celebrating a rate cut. They were celebrating something simpler: maybe the Fed can just leave things alone.

Join the Math Makes Money Trading Team

One-Button AI Bot Trading

Join Today — Trade with Rob's AI Bot (Phil) Today.

Live VIP Group Video with Rob and Nick.

↓ Click the big red button below to join ↓

Market & Technology · September 2026

Microsoft's $145 Billion Question

After a year of enormous AI spending, Microsoft is beginning to show investors where the return may come from.

Microsoft spent approximately $145 billion over the past year building the data centers and computing power needed for artificial intelligence. Few companies could afford a bet that large. Even Microsoft eventually had to answer the obvious question: When would all that spending begin to pay off?

The latest results finally provided some evidence. Azure and other cloud-services revenue grew 43% last quarter, accelerating from 40% in the previous quarter. Azure now generates more than $100 billion annually, while Microsoft's total cloud business brought in $59.3 billion for the quarter.

Microsoft also reported $678 billion in contractual commitments that will be recorded as revenue as those services are delivered. It is not money sitting in the bank today, but it does show how heavily companies are committing to Microsoft for the years ahead.

Copilot gives Microsoft an advantage few competitors can match. More than 30 million seats are already paid for, with new subscriptions more than doubling last quarter. Because Copilot works inside Word, Excel, Teams, GitHub and Azure, Microsoft does not have to find a new market — the customers are already there.

There is still a cost to all this growth. Microsoft's cloud margins have declined as its AI infrastructure has expanded, so the company must continue turning higher usage into higher profits.

Wall Street is taking notice. CFRA has placed a $550 price target on Microsoft, while Bank of America recently raised its target to $600.

Sources: Microsoft FY2026 Q4 results; CFRA Research; Bank of America analyst research.

A Market Tidbit · 1868

The Stock With No End

In 1868, Cornelius Vanderbilt — the richest man in America — set out to control the Erie Railroad by quietly buying its stock.

Erie's directors knew they could never outspend him, so they fought back with a remarkable trick: every time Vanderbilt bought more shares, they simply printed more.

Vanderbilt's brokers kept buying until he reportedly owned nearly 200,000 shares. Still, no one could say he controlled the railroad because no one knew how many shares actually existed.

When Vanderbilt discovered the trick, he went to court and won an order stopping Erie from issuing more stock. The directors ignored it and kept printing. Cited for contempt and facing arrest, they grabbed approximately $6 million, fled across the Hudson River and barricaded themselves inside a New Jersey hotel.

From their hideout, they used political connections to persuade New York lawmakers to legalize the disputed shares after they had already been sold.

Vanderbilt recovered much of his money — but he never captured the railroad.

Public Service Announcement

Labor Day Market Hours

Monday, September 7, 2026 · Eastern Time

Other CME Futures — Monday

Not Subscribed Yet?

Sign up for the newsletter here

Free Community

Join our Discord with over 1,000 like-minded traders who believe that math makes money when it comes to trading

Trade ideas, screenshots, daily banter. Zero cost.