Fed Holds Rates Steady and Ends the Powell Era Deeply Divided

Key takeaways

Jerome Powell plans to stay on the Fed's board after his term ends, emphasizing concerns over the Fed's independence amid legal investigations.
Market volatility remains high, influenced by Federal Reserve policies, earnings reports, and geopolitical uncertainties.
The completion of the Kone and TK Elevator merger signals a major consolidation in the elevator industry.
Legal limits on the use of race in voting district maps could lead to significant political shifts, potentially reducing minority representation.
The U.S. has spent around $25 billion on military operations in Iran, with costs expected to rise.
Health research suggests marriage may lower cancer risk, possibly due to better support systems and healthier behaviors among married individuals.

Summary

Federal Reserve and Jerome Powell's Last Meeting

This section discusses the recent Federal Reserve meeting where interest rates were held steady, with some dissents hinting at a possible rate cut in the future. It highlights that Jerome Powell, in his final role as Fed Chair, will remain on the Fed's board amidst an investigation into him, emphasizing concerns about the Fed's independence. Powell's successor, likely Kevin Worsh, is expected to be confirmed shortly, with discussions on how Worsh may influence future rate decisions.

Market Reactions and Tech Earnings

Markets reacted to the Fed's decision and Powell's remarks, with increases in bond yields and market volatility, notably in tech stocks. Bill Ackman’s hedge fund went public, and big tech companies like Meta, Google, Amazon, and Microsoft reported strong earnings, with Meta's revenue soaring 33%. However, Meta also announced increased spending on AI data centers, leading to a slight drop in its stock in after-hours trading.

Global Business and Legal Developments

Finland's Kone is set to acquire German rival TK Elevator in a massive deal, creating the world's largest elevator company. On the legal front, families of shooting victims in Canada sued OpenAI over AI-generated threats that preceded a massacre, leading to questions about AI safety protocols. Additionally, a Supreme Court decision has narrowed protections under the Voting Rights Act, potentially affecting minority districting and political representation.

Military Spending and International Conflict Costs

The Pentagon provided a first estimate of the cost of ongoing military operations in Iran, totaling approximately $25 billion so far, mainly spent on munitions and operational expenses. This figure is expected to rise as the conflict continues, and additional budget requests are planned.

Health and Social Science Insights

A recent study links marital status with cancer risk, finding that unmarried men and women have significantly higher rates of cancer compared to those who are married. Experts suggest healthier behaviors and stronger support systems among married individuals may explain this correlation, highlighting the importance of social support in health outcomes.

Show notes

P.M. Edition for April 29. In an unusual move, Federal Reserve Chair Jerome Powell said today that he plans to stay on the Fed’s board after his term as chair ends next month. WSJ economics reporter Matt Grossman explains Powell’s reasoning, and what divisions within the central bank could mean for interest rates. Plus a Supreme Court decision today limits how states use voters’ race to draw voting districts. James Romoser, who covers the Supreme Court for the Journal, says that could lead to a loss of Democratic seats in some states. And the Pentagon gives its first precise estimate for how much the Iran war has cost the military so far: $25 billion. Alex Ossola hosts.

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