Chapter 1: What is the main topic discussed in this episode?
News when you want it with Bloomberg News Now. I'm Amy Morris. There's a closing bill for this Wednesday on Wall Street where the Federal Reserve's decision to leave rates unchanged sent stocks and bonds wavering. Much more on that just ahead. But first, let's bring you those closing numbers. We do it each day here at Bloomberg.
Chapter 2: What did the Federal Reserve decide regarding interest rates?
The S&P 500 little changed on the downside. NASDAQ gained 40 points. The Dow gained 12 points. The 10-year Treasury yield at 4.23 percent, the two-year yield at 3.57 percent. The Federal Reserve did vote 10 to 2 to keep those interest rates steady, even as President Trump continues to insist they be lowered.
Fed Chair Jay Powell says they can loosen policy if they have to, especially when it comes to the impact from tariffs.
The expectation is that we will see the effects of tariffs flowing through goods prices peaking and then starting to come down, assuming there are no new major tariff increases that are begun. If we see that, that would be something that tells us that we can lose some policy.
Fed Chair Powell spoke to the case before the Supreme Court on the attempted ousting by President Trump of Fed Governor Lisa Cook, and he was asked why he attended that court hearing.
I would say that that case is perhaps the most important legal case in the Fed's 113-year history. And as I thought about it, I thought it might be hard to explain why I didn't attend.
And Powell has some advice for the next Fed chair.
Stay out of elected politics. Don't get pulled into elected politics. Don't do it.
Powell's term ends in May, but he is eligible to stay on the board through 2028. Checking earnings now, Microsoft reported revenue for the second quarter that beat analyst estimates. Microsoft shares now down more than 7% in the post-market. Meta reported revenue for the fourth quarter, beating the average analyst estimate. Meta shares nearly 1.5% lower in the post-market.
Tesla shares are up 2.5% in aftermarket trading after fourth quarter adjusted earnings beat estimates. The Fed decision to hold rates steady drew modest reaction on Wall Street with stocks and bonds edging lower, but the Bloomberg dollar spot index is up a tenth of a percent.
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