The Federal Reserve is the central bank of the United States, responsible for monetary policy and setting the benchmark interest rate. Recent coverage has centered on how AI intersects with rate decisions: an AI simulation called Sim Fed, built by researchers Tara Sinclair and Sophia Kazinnik, predicts rates will hold steady, while former New York Fed President Bill Dudley expects a hold in October and a hike in December. Governor Christopher Waller discussed monetary policy in the age of AI, and official Schmid said regulators need to assess whether the AI ecosystem is becoming too big to fail.
Big Tech AI Bills Hit Stocks; Michigan Automakers ReboundThe AI trade cracked for a third straight week: Alphabet missed revenue estimates and fell nearly 13% in a day, erasing about $482 billion in market value; Amazon earned $1.89 a share versus $1.96 expected; Intel plunged about 28% on weak guidance. Investors rotated into defensives and Treasuries, Michigan automakers rebounded, and the Fed held rates at 3.75%-4%.
AI Fed Simulation Predicts Rates Hold SteadyResearchers Tara Sinclair and Sophia Kazinnik built Sim Fed, an AI simulation in which agents impersonate the 12 rate voters, including 'Sim Powell' and 'Sim Cook'. Ahead of Wednesday's Fed decision, the simulation predicts the benchmark interest rate will hold steady.
Markets look to Big Tech for evidence of AI payoffOn Bloomberg This Weekend, MetLife Investment Management chief market strategist Drew Matus discussed how AI investment is driving markets, corporate spending and parts of the US economy, as investors await Big Tech earnings for evidence the spending pays off. He also flagged risks from rising tech investment and what markets want to hear on inflation from Fed Chair Kevin Warsh.
US economy 'quite dependent' on AI growth, says strategistMetLife Investment Management strategist Tani Fukui said the US economy is quite dependent on AI as a growth engine. Oil's rebound weighed on stocks and bonds, and AI-linked shares sold off ahead of the Fed's rate decision.
Dudley sees Fed holding in October, hike in DecemberFormer New York Fed President Bill Dudley expects the central bank to hold steady in October and raise rates in December, discussing the Fed troika's messaging and how the AI buildout affects rates.
Fed's Waller on Monetary Policy in the Age of AIFederal Reserve Governor Christopher Waller discussed how central banks can respond to the economic and social changes driven by AI at the 2026 Bloomberg New Economy Forum.
Ray Dalio Warns AI Bubble Could Pop as Rates RiseBillionaire investor Ray Dalio believes an AI bubble has formed and could pop due to rising debt loads and elevated interest rates. He expects the pop may not be imminent but is approaching.
AI Markups Distort S&P Earnings Power, Larry McDonald SaysLarry McDonald, founder of The Bear Traps Report, says AI-related markups are distorting the true earnings power of the S&P 500. His remarks come as traders await earnings season and inflation data that could shape the Fed outlook, with stocks fluctuating near record highs.
Apollo's Slok on high rates, housing and AI-induced bank run riskApollo Chief Economist Torsten Slok discusses on Bloomberg the impact of higher interest rates on US housing supply, the prospect of an AI-induced bank run, and which parts of the economy are most sensitive to Federal Reserve rate moves.
AI Bots Swarm Fed's FRED Data Site as Dimon Warns of Security RisksAI agents have been swarming the Federal Reserve's FRED data site, raising concerns about potential errors in how economic information is described and cited. JPMorgan CEO Jamie Dimon also warned about AI security risks.
AI boom defies high rates, complicating Fed's inflation fightThe New York Times reports that Fed rate hikes have not deterred companies from expanding AI capabilities, even as borrowing costs hit multi-decade highs and prices for electricity and high-bandwidth memory surge. If inflation does not ease, the Fed may need to tighten more than otherwise, with rate-sensitive sectors like housing and autos absorbing the blow and the labor market at risk.
AI Stocks Support Broader Market as Divergence WidensSchwab's Kevin Gordon says AI-related tech stocks are supporting the broader market even as many individual names fall sharply, leaving increasingly narrow leadership. Investors are focused on whether companies can sustain huge AI capex, while gradual Fed tightening and a labor market avoiding mass layoffs could support stocks.
Fed's Schmid: need to assess if AI ecosystem is too big to failFederal Reserve official Schmid said there is a need to understand whether the AI ecosystem is becoming too big to fail. The remark highlights regulators' focus on AI industry concentration and potential systemic risk.
Amid Market Hurdles, AI Remains an Earnings TailwindDespite worries over the Iran war, inflation, a hawkish Fed and soaring bond yields, the S&P 500 is up nearly 12% this year as of Sept. 19. FactSet's John Butters notes third-quarter earnings are projected to grow 28.7%, the third straight quarter of at least 25% growth, with AI seen as a key tailwind.
Fed meets amid uncertainty over oil, AI and inflationThe Federal Reserve met against a backdrop of uncertainty from oil prices, AI developments and inflation, weighing potential impacts on macroeconomic policy. The meeting highlights policymakers balancing new technology risks with traditional economic factors.
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