Fed's Surprising Caution, Airbus Slams Engine Supplier, More

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What is the main topic discussed in this episode?

Unknown 0:00
The UK stands apart as a place to do business, not because of one advantage, but many working together. Over £10 trillion in capital, four of the world's top universities, a 10-year industrial strategy in action, its stability with dynamism, global reach with local depth. It all adds up to greater growth. Find out more at business.gov.uk slash growth.
Caroline Hepker 0:28
News when you want it with Bloomberg News Now. I'm Caroline Hepker.
Stephen Carroll 0:32
And I'm Stephen Carroll.
Caroline Hepker 0:33
Federal Reserve officials have shown surprising caution about cutting interest rates, which could widen the central bank's rift with the White House. Minutes from January's meeting showed policymakers seeing the US labour market stabilising, but inflation still stubbornly high. Now that puts the central bankers at odds with President Trump, who has repeatedly said that he wants the next Fed chief to deliver sharply lower interest rates. Morgan Stanley's chief U.S. Secretary of State and CIO Mike Wilson says that ultimately the Fed will cooperate with the Treasury.
Mike Wilson 1:07
With respect to the Fed independence, I mean, I have probably had a bit different view here. I mean, as far as I can tell, I mean, the Fed independence has been sort of fading for the better part of 20 years, really, since the financial crisis. And when I say independent, I don't mean they're under the thumb of the White House. What I mean is that they have to play ball in terms of their role to help the government fund itself.
Caroline Hepker 1:31
Well, good to stand is Mike Wilson speaking there. Meanwhile, the New York Fed came under attack from the White House's National Economic Council director, Kevin Hassett, for publishing a study showing U.S. companies and consumers were bearing the vast majority of the costs of tariffs.
Stephen Carroll 1:48
OpenAI is close to finalising the first phase of a new funding round expected to bring in more than $100 billion. Bloomberg understands the record-breaking deal would give the startup additional capital to develop its artificial intelligence tools. Brad Smith is Vice Chair and President of Microsoft, a key partner for OpenAI. He says the chat GPT maker is branching out.
Brad Smith 2:09
It's not as exclusive as it was, say, a few years ago. OpenAI uses our compute. They train models in our data centers, but they work with other companies as well. We critically rely on OpenAI's frontier models. They are among the best. In many days, they are the best in the world, but we have a relationship with Anthropic.
Stephen Carroll 2:33
Microsoft's Brad Smith there speaking to Bloomberg. The first portion of the funding round will largely come from strategic investors, including Amazon, SoftBank and Nvidia, as well as Microsoft. Sources tell Bloomberg the next phase of the deal, which will include venture capital firms and other investors, may bring the total fundraising amount substantially higher.

What recent decisions has the Federal Reserve made regarding interest rates?

Caroline Hepker 2:53
Now, Meta CEO Mark Zuckerberg says Instagram's age limits are very hard to police and he downplayed how much teenage users drive revenue. The world's fifth richest person told a court in Los Angeles that the company had gotten to the right place on the issue of young people facing social media addiction. Tech companies are facing a global backlash stemming from the impact of their platforms and how they're policed. The UK Minister for Victims, Alex Davis-Jones... says that social media firms have a lot to answer for.
Alex Davies-Jones 3:27
They are monetising and profiting off of the misery of the victims here with these images being shared on their platforms and therefore they have a responsibility to act. And if they don't act, then they can be fined 10% of their global annual revenue or we can take action to block their services in the United Kingdom.
Caroline Hepker 3:44
Alex Davies-Jones and her government plan to introduce rules requiring firms to remove abusive images from their sites within 48 hours in the UK or face fines.

How is the US labor market impacting Federal Reserve policies?

Caroline Hepker 3:56
But action against these mostly American companies may put countries on a collision course with the Trump administration, which has lashed out at attempts to regulate US tech giants.
Stephen Carroll 4:07
Shares in Airbus have dropped after the aerospace giant said the lack of reliable engines supplies for its best-selling A320 jets is holding back aircraft deliveries.

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