Today’s big news revolves around the Federal Reserve’s meeting, which has captured the attention of the markets. While there is a lot of buzz around speculative trading in Trump Media (DJT) and GameStop (GME), these activities are considered just noise compared to the focus on the Fed’s meeting. The broader market is more concerned about the potential for Federal Reserve officials to pull back on their predictions to cut interest rates in 2024.
In other economic news, the economy added a significant number of jobs in May, raising concerns about inflation. The upcoming inflation report is not expected to fall to 2.0%, which could potentially necessitate keeping interest rates above 5% to tighten credit conditions. Additionally, the Fed is slowing down its reduction in the balance sheet runoff, with plans to start slowing the cap on Treasury securities that will be allowed to mature on June 1.
This move to slow down the balance sheet reduction is aimed at reducing the risk of unwanted market disruptions, giving the Fed more flexibility to keep rates at their current levels.
Shifting gears to the AI space, Elon Musk made headlines by stating that he would ban Apple (AAPL) devices at his company if Apple integrated OpenAI at the operating system level. Musk cited security concerns as the reason for this decision, expressing worries about the privacy risks that the AI technology could bring.
It’s worth noting that Musk’s own startup, xAI, is looking to compete with OpenAI and has recently received a $6 billion series B funding, leading to a $24 billion valuation. Musk’s actions and statements in the AI arena reflect his commitment to privacy and security in the increasingly complex world of artificial intelligence.
Overall, today’s news highlights the intersection of finance, technology, and policy, showing how these different sectors can impact each other and shape the future of our economy and society.