Fed Keeps Rates Steady, Tech Earnings Flurry, More
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What is the main topic discussed in this episode?
News when you want it with Bloomberg News Now, I'm Doug Krisner.
Why did the Federal Reserve keep interest rates unchanged today?
The Fed left interest rates unchanged today in a move that was widely expected. Policymakers pointed to improvement in the American economy and the job market. Here is Chair Jay Powell.
The U.S. economy expanded at a solid pace last year and is coming into 2026 on a firm footing. While job gains have remained low, the unemployment rate has shown some signs of stabilization, and inflation remains somewhat elevated.
And as a result of those points, the Fed signaled a more cautious approach to potential future adjustments in interest rates. Now, today's decision comes as the Fed faces pressure from the Trump administration. There is a criminal investigation regarding improvements to the Fed's headquarters and the Supreme Court case over President Trump's attempt to remove Fed Governor Lisa Cook. Powell stressed the importance of Fed independence.
Every advanced economy democracy in the world. has come around to this common practice.
What did Chair Jay Powell say about the U.S. economy, jobs and Fed independence?
It's just an institutional arrangement that has served the people well. And that is to have a separation between, to not have direct elected official control over the setting of monetary policy. And the reason is that monetary policy can be used through an election cycle to affect the economy in a way that will be politically worthwhile.
That is Fed Chair Jay Powell. We move to earnings news next. Tesla reported profit for the latest quarter above analyst expectations. That seems to suggest the company is making progress toward overcoming rising cost and an end to U.S. incentives for electric vehicles. The bigger story, though, was Tesla's artificial intelligence plans. The company is planning to invest $2 billion into Elon Musk's AI company, XAI. Here's Bloomberg's Ed Ludlow.
They have arranged a framework where Tesla can leverage XAI's work in models to accelerate what Tesla wants to do in the physical world. In other words, humanoid robotics and autonomous driving.
That is Bloomberg's Ed Ludlow. Shares in Tesla were up 3% in late New York trading. We also heard after the bell from Meta Platforms. The company reported earnings for Q4 above analyst estimates, and Meta raised guidance for the current quarter. Meta said its robust advertising business is making it possible for the company to invest in AI at record levels. We got reaction from John Belton, Managing Director for Growth Portfolios at Gabelli Funds.
Meta's headline numbers are a really interesting reflection of the market's attitude towards this right now because their CAPEX and OPEX guides for 2026 were both way ahead of even some of the higher estimates I'd seen out there.
John Belton there from Gabelli Funds. Shares in Meta were up 9% in late U.S. trading. Microsoft reported earnings and revenue for the latest quarter above estimates. However, the company's growth in cloud sales slowed.
Which political pressures and investigations are affecting the Fed's decisions?
Here is Bloomberg analyst Anurag Rana.
I think it's usually high expectations and, you know, the fact that they only met Azure growth rates, which was 38%. I think that's probably weighing on the stock because, you know, one would have expected them to blow out that number. It has been around 39% the last couple of quarters. So I think that's where a little disappointment could be. But that could also be because of supply constraints. That's something we have highlighted in our research before.
Anurag Rana from Bloomberg Intelligence. Now, Microsoft also reported CapEx spending hit a record high. Shares were down 5% in late U.S. trading. The dollar ended a four-day slump. That was after Treasury Secretary Scott Besant reiterated the Trump administration's desire for a strong dollar. Speaking today to CNBC, Besant also said the U.S. was not intervening in support of the Japanese yen.
If we have sound policies, the money will flow in. And we are bringing down our trade deficits. So automatically, that should lead to more dollar strength over time.
Are we intervening in the currency market right now, strengthening the yen? Is that happening?
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–0:03
2
Why did the Federal Reserve keep interest rates unchanged today?
0:03–1:03
3
What did Chair Jay Powell say about the U.S. economy, jobs and Fed independence?
1:03–3:05
4
Which political pressures and investigations are affecting the Fed's decisions?
3:05–5:30
Speakers
7 identifiedMore from Bloomberg News Now
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