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The Federal Reserve is monitoring shifts in the employment landscape “very, very carefully” following a raft of recent layoffs at large U.S. companies, Chair Jerome Powell said Wednesday at a news conference in Washington.

 “You see a significant number of companies either announcing that they are not going to be doing much hiring or actually doing layoffs, and much of the time they’re talking about AI and what it can do,” Powell said. “We’re watching that very carefully.”

The Federal Reserve’s interest rate policy is unlikely to impact the tech sector’s spending on artificial intelligence infrastructure, Chair Jerome Powell said.

 “I don’t think that the spending that happens to build data centers all over the country is especially interest sensitive,” Powell said. “It’s based on longer run assessments that this is an area where there’s going to be a lot of investment and that’s going to drive higher productivity.”

 “I don’t know how those investments will work out, but I don’t think that they’re particularly interest sensitive compared to some of the other sectors,” he said.

The Federal Reserve’s interest rate policy is unlikely to impact the tech sector’s spending on artificial intelligence infrastructure, Chair Jerome Powell said.

 “I don’t think that the spending that happens to build data centers all over the country is especially interest sensitive,” Powell said. “It’s based on longer run assessments that this is an area where there’s going to be a lot of investment and that’s going to drive higher productivity.”

 “I don’t know how those investments will work out, but I don’t think that they’re particularly interest sensitive compared to some of the other sectors,” he said.

Fed Chair Powell said there’s a growing sense among policymakers that it may be time to pause and assess the impact of the Fed’s two cuts this year before moving again.

 “We are at a place now where we have, in fact, cut two more times … we are 150 basis points closer to neutral, wherever that may be, than we were a year ago,” he said at the news conference. “There’s a growing chorus now of feeling like maybe this is where we should at least wait a cycle, something like that.”

Take tariffs out of the equation, and inflation isn’t looking too bad, Chair Jerome Powell suggested Wednesday. “Inflation, away from tariffs, is actually not so far from our 2% goal,” he said at the post-meeting news conference.

 Powell said the central bank estimates tariffs make up about five-tenths or six-tenths of the core personal consumption expenditures (PCE) price index, the Fed’s main inflation gauge. That means, excluding tariffs, core PCE might be in the 2.3% to 2.4% range, he said.

 “The thing about tariff inflation, the base case is it will come and it probably will increase further but … it will be a one-time increase,” Powell said.

Federal Reserve Chair Jerome Powell cautioned investors against assuming the US central bank would follow its second straight interest-rate cut with another in December.

 “A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it,” Powell said in the opening comments of his post-meeting press conference.

 The remarks seemed aimed at reining in expectations in financial markets, where the probability of another quarter-point cut in December was firmly above 90% before he spoke.

The Federal Reserve will continue to get insight into the economy through sources outside of government data, but any great amount of uncertainty could affect what happens at the December meeting, Powell said.

“We get some data on inflation, some data on economic activity. We’ll have a picture of what’s going on. We also will have the Beige Book, again,” Powell said. “I would say we’re not going to be able to have the detailed feel of things. But I think if there were a significant or material change in the economy one way or another, I think we’d pick that up through this.”

“So in terms of how it might affect December, … we just don’t know what we’re going to get. If there is a very high level of uncertainty, then that could be an argument in favour of caution about moving,” Powell continued. “But we’ll have to see how it unfolds.”

The Federal Reserve on Wednesday said it will stop shrinking its Treasury holdings beginning December 1, ending a three-year-long effort after stress signals in money markets intensified in recent days.

The central bank said it will stop unwinding Treasury holdings, currently at a pace of $5 billion a month, but will continue the runoff of its portfolio of mortgage-backed securities by about $35 billion a month.

Wednesday’s announcement was a swift reversal for the Fed, which until recently indicated that a decision on the end of the runoff — known as quantitative tightening — was months away.

Fed Chair Jerome Powell called out the ongoing federal government shutdown — which is currently the second-longest in US history — as a drag on economic activity.

“The shutdown of the federal government will weigh on economic activity while it persists,” Powell said during the Wednesday news conference. “But these effects should reverse after the shutdown ends.”

Powell’s comments come after the Congressional Budget Office said Wednesday that the month-long shutdown has resulted in a loss of at least $7 billion in gross domestic product by the end of 2026. CBO Director Phillip Swagel said in a letter that the loss will grow as the closure continues.

The Federal Reserve has gone four weeks without government data, but what is available points to a softening labour market, Chair Jerome Powell said.

“Although official employment data for September are delayed, available evidence suggests that both layoffs and hiring remain low, and that both households’ perceptions of job availability and firms’ perceptions of hiring difficulty continue to decline in this less dynamic and somewhat softer labour market,” Powell said. “The downside risks to employment appear to have risen in recent months.”

Fed Chair Jerome Powell said that what economic data is available shows that economic growth has been surprising to the upside.

“Data available prior to the shutdown show that growth in economic activity may be on a somewhat firmer trajectory than expected, primarily reflecting stronger consumer spending,” the central bank chief said.

The Fed has been hamstrung in assessing economic progress during the recent shutdown, as all data collection and releases have been suspended.

US stocks fell on Wednesday after Federal Reserve Chair Jerome Powell said that the central bank might not cut interest rates again this year.

The Nasdaq Composite declined 0.2%, and the S&P 500 traded down 0.5%. The Dow Jones Industrial Average dropped 184 points, or 0.4%. All three leading US indexes scored new all-time intraday highs earlier in the trading day.

Chair Jerome Powell noted that members of the rating-setting FOMC were far from unified about what the central bank’s next move should be.

“In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” Powell said. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”

Treasuries extended losses after the Federal Reserve delivered a widely expected quarter-point interest-rate cut amid signs of a softening jobs market.

The central bank reduced its policy setting to 3.75%-4% in its second straight cut. Traders continued to price in another quarter-point cut at the December meeting and expect the rate to be reduced to 3% by September 2026.

Shorter-dated yields, which more closely reflect monetary policy expectations, were three basis points higher on the day at 3.52%. The 10-year yield rose above 4%.

Still, yields remain near their lows for the year and the bond market has rallied across the board in recent months on signs of weaker job hiring. Measures of consumer inflation, meanwhile, remain above the Fed’s target, running near an annual pace of 3%.

The Federal Reserve put policy on autopilot Wednesday thanks to the lack of economic data due to the government shutdown, said Alexandra Wilson-Elizondo, global chief investment officer of multi-asset solutions at Goldman Sachs Asset Management.

“A single soft inflation release, anchored expectations, and anecdotal cooling labour demand support a cautious easing bias,“ she said. “If conditions hold, another 25-basis point cut at the December meeting seems likely.“

Google’s YouTube will use artificial intelligence to improve the visual clarity of many low-resolution videos on its platform when viewed on TV screens.

YouTube will first implement the feature, known as upscaling, for videos that were originally uploaded at resolutions under 1080p, according to a blog post on Wednesday by senior product director Kurt Wilms. The company said it will support upscaling to even higher 4K quality “in the near future.”

Some creators might take issue with the platform making adjustments to their content, but Wilms said that the original files will always be kept intact. YouTube members can opt out of the “super resolution” upscaling feature altogether if they don’t like how it makes their videos look, he said.

Super-resolution videos will be clearly labelled, making it easy for viewers to see any video as it was originally presented, he added.

Here are key takeaways from the Federal Reserve’s interest-rate decision on Wednesday:

Federal Open Market Committee votes, 10-2, to lower the benchmark interest rate by a quarter point to a target range of 3.75%-4%

Fed says it will end the reduction of its securities holdings beginning on December 1, after slowing the pace of runoff earlier this year, and will roll maturing agency debt into Treasury bills.

Fed Governor Stephen Miran voted against the decision in favour of lowering rates by a half point, while Kansas City Fed President Jeff Schmid dissented in favour of holding rates steady.

Statement maintains description of the labour market, noting that “job gains have slowed, and the unemployment rate has edged up but remained low through August,” adding “more recent indicators are consistent with these developments” and “downside risks to employment rose in recent months”

Fed says “available indicators” suggest economic activity has been expanding at a moderate pace, and reiterates that inflation “has moved up since earlier in the year and remains somewhat elevated”

US stocks remained in the green on Wednesday, boosted by tech names, after the latest interest rate decision from the Federal Reserve.

The Nasdaq Composite climbed 0.5%, and the S&P 500 traded up 0.2%. The Dow Jones Industrial Average advanced 146 points, or 0.3%. All three leading US indexes scored new all-time intraday highs on the trading day.

The Federal Reserve on Wednesday (October 29) approved its second straight interest rate cut, a widely expected move that came despite little recent visibility on the economy due to the government shutdown.

By a 10-2 vote, the central bank’s Federal Open Market Committee lowered its benchmark overnight borrowing rate to a range of 3.75%-4%. In addition to the rate move, the Fed announced that it would be ending the reduction of its asset purchases – a process known as quantitative tightening – on December 1.

Governor Stephen Miran again cast a dissenting vote, preferring the Fed move more quickly with a half-point cut. St. Louis Fed President Jeffrey Schmid joined Miran in dissenting but for the opposite reason – he preferred the Fed not cut at all.

US central bank cuts rates for the second time this year, will end balance sheet run-off in December

Prime Minister Keir Starmer refused to rule out raising income tax, national insurance or value-added tax at the upcoming budget, suggesting the government may break its pre-election promises in order to fill a growing hole in the public finances.

Asked by Conservative opposition leader Kemi Badenoch if he’d adhere to the electoral vow on the three key tax rates — one of Labour’s flagship offerings in last year’s campaign — the premier avoided an answer.

The federal government shutdown has already cost the US economy at least $18 billion this year, a figure that “will intensify” in the weeks to come, according to the Congressional Budget Office.

The nonpartisan organisation emphasised that much of the impact will be temporary, with a short-term boost to economic growth in the first quarter of next year. However, they estimate that between $7 billion and $14 billion of the hit to gross domestic product will not be recovered, depending on the ultimate length of the shutdown.

GDP is already poised to be at least one percentage point lower in the fourth quarter due to the government shutdown, according to the CBO report released Wednesday.

Nvidia Corp. has gradually become one of the most important players in the venture capital world, without being a VC firm. The chipmaker said last month that it’s planning to invest $100 billion in OpenAI — a deal that would mark the largest startup investment of all time. It’s part of a growing string of bets on private artificial intelligence companies that Nvidia has made across the world.

At the company’s highly anticipated GTC event in Washington on Tuesday, Nvidia Chief Executive Officer Jensen Huang called out a number of private companies that his company’s taken stakes in by name, including the AI firm Perplexity, the Chinese autonomous vehicle company WeRide and the robotics startup Figure AI. He shouted out to several of their executives sitting in the audience.

Microsoft Corp. said that some users are having issues accessing its suite of business applications and games. “We’re investigating reports of issues accessing Microsoft 365 services and the Microsoft 365 admin center,” the company said in a post on social media network X on Wednesday.

Microsoft has identified portions of internal infrastructure experiencing connectivity issues and is working on recovery, the company said. Issue reports spiked on Downdetector shortly after 11 a.m. in New York.

The UK oil refining industry could eventually disappear completely if the cost of carbon continues to increase, according to Exxon Mobil Corp., which operates the nation’s biggest oil-processing plant.

The company says refining should be included in an initiative known as the carbon border adjustment mechanism, which imposes a charge on imports of goods with weaker environmental standards. Two of the UK’s oil refineries have already closed this year, in part because of elevated costs and competition from plants in Africa and Asia.

Fiserv Inc. stock suffered a record plunge after the fintech slashed its outlook for full-year earnings and unveiled third-quarter results that confounded Wall Street analysts.

Chief Executive Officer Mike Lyons, who took the reins in February, said he discovered that Fiserv wasn’t going to be able to deliver on its previous promises to investors after he undertook a broad-based review of the business in recent months.

Wall Street traders looked past concerns about elevated technology valuations, with the high-profile industry driving stocks toward a fresh record as prospects for another Federal Reserve rate cut bolsters the outlook for corporate earnings.

A renewed tech rally sent the S&P 500 up for a fifth straight day, putting the gauge on track for its longest streak of monthly gains since 2021. While there have been worries about narrowing breadth that could jeopardize the advance in the near term, confidence in the outlook for artificial intelligence kept powering tech megacaps and the broader market.

One options trader is making even the most bullish Wall Street analysts look cautious, placing a huge bet on the S&P 500 Index shooting up more than 30% by the end of next year.

The trader spent $20.9 million in premiums on Tuesday afternoon on call options wagering on the gauge’s rally above 9,000 by December 2026. That kind of rally would dwarf this year’s 17% gain so far, with the S&P 500 around 6,900 ahead of a plethora of technology earnings and a Federal Reserve interest-rate decision.

Donald Trump said he expects to lower tariffs the US has imposed on Chinese goods over the fentanyl crisis and speak with China’s Xi Jinping about Nvidia Corp.’s flagship Blackwell artificial intelligence chip, as leaders of the world’s biggest economies seek to ease tensions in a meeting on Thursday.

“I expect to be lowering that because I believe they’re going to help us with the fentanyl situation,” Trump told reporters on Air Force One as he headed to South Korea on Wednesday, a day before he’s slated to meet with China’s president.

Boeing Co. is laying plans to push production of its 787 Dreamliner to new heights, testing its ability to clear an inventory of parked planes and the strength of its strapped supply chain.

The planemaker is planning to double the South Carolina campus where it manufactures the advanced widebody jet, even as it completes work on the last 10 Dreamliners built prior to 2023. They’re among the last remaining jets in Boeing’s so-called “shadow factory” that at one point encompassed hundreds of undelivered 737 Max and Dreamliners requiring extensive repairs.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.