The Federal Reserve on Wednesday cut its benchmark interest rate by 0.25 percentage points, bringing the federal funds rate to its lowest level in more than three years.

The reduction lowers the federal funds rate — what banks charge each other for short-term loans — to between 3.5% and 3.75%, down from its prior range of 3.75% to 4%. The Fed's decision marks the third consecutive rate cut since September, lowering the federal funds rate by a total of 0.75 percentage points this year.

Despite the lack of key government economic data because of the recent U.S. government shutdown, the Fed has been closely monitoring the slowdown in monthly job growth as well as rising inflation. Figures from ADP, which tracks private payrolls, showed that employers shed 32,000 jobs in November, a signal of continuing headwinds in the labor market.

(CBS - Continue Reading)

Swiss rate-setters are widely expected to hold their key rates at current levels Thursday, a stance they may adopt for the longer term, according to analysts.

An economists’ poll predicted an unchanged Swiss National Bank policy rate of zero percent, with only very few analysts noting that the bank could lower its benchmark rate into negative territory at -0.25%. A hold this month would repeat the decision in September, which followed six straight reductions, including cuts of 25 basis points in June and March, and 50bp last December.

Headline annual inflation in the Alpine country last month dropped to zero from 0.1% in October, keeping it at the bottom of the SNB target range of 0-2%. November consumer prices contracted -0.2% on the month versus the previous flat reading. But this increased weakness in consumer price growth is unlikely to spur officials into a rate cut on Thursday.

(LiveSquawk - Continue Reading)

Elon Musk and Jeff Bezos for years have raced to build rockets and launch satellites. Now they’re racing to take the trillion-dollar data-center boom into orbit.

Bezos’s Blue Origin has had a team working for more than a year on technology needed for orbital AI data centers, a person familiar with the matter said. SpaceX plans to use an upgraded version of its Starlink satellites to host AI computing payloads, pitching the technology as part of a share sale that could value the company at $800 billion, according to people involved in the discussions.

Deploying satellites that provide significant AI computing capability will present difficult engineering hurdles and pose tough questions about the price of deploying swarms of the devices into orbit.

(WSJ - Continue Reading)

Meta Platforms Inc.’s Mark Zuckerberg, months into building one of the priciest teams in technology history, is getting personally involved in day-to-day work and pivoting the company’s focus to an artificial intelligence model customers pay to use.

One new model, codenamed Avocado, is expected to debut sometime next spring, and may be launched as a “closed” model — one that can be tightly controlled and that Meta can sell access to, according to people familiar with the matter, who declined to speak publicly about internal plans. The move, which aligns with what rivals Google and OpenAI do with their models, would mark the biggest departure to date from the open-source strategy Meta has touted for years. Open-source models allow outside developers and researchers to review and build upon the code. Meta’s new Chief AI Officer Alexandr Wang is an advocate of closed models, according to the people.

(BBG - Continue Reading)