Fed Rate Cuts Likely Over

FINANCE
Fed Rate Cuts Likely Over

The Federal Reserve’s rate-cutting cycle may already be over following a stronger-than-expected December jobs report, according to Bank of America analysts. Payrolls rose by 256,000, surpassing forecasts of 155,000, while the unemployment rate dipped to 4.1%.

“Given a resilient labor market, we now think the Fed cutting cycle is over,” BofA noted, adding that inflation remains above target and economic activity robust. The conversation could shift to potential rate hikes if core inflation exceeds 3%.

The Fed cut rates by 100 basis points last year, but Wall Street now predicts only one cut in 2025. Instead, rising Treasury yields and persistent wage growth suggest monetary policy isn’t yet restrictive enough.

BofA and other economists highlight that continued consumer purchasing power, supported by wage inflation, could sustain economic growth, even as hiring slows. Meanwhile, policies from the incoming Trump administration may introduce further inflationary pressures, complicating the Fed’s outlook.

TECH
Nvidia CEO Applauds Musk’s AI Vision

Nvidia CEO Jensen Huang commended Elon Musk’s advancements in artificial intelligence during an interview at CES. Highlighting Musk’s achievements in cognitive intelligence, autonomous driving, and robotics, Huang said Musk is focusing on “exactly the right things” in AI development.

Huang noted that Musk’s strategic advantage lies in Tesla’s extensive real-world data collection from its AI-enabled factories, autonomous vehicle algorithms, and large fleet of cars. “He’s been working on this for a long time and is in a phenomenal position to leverage it,” Huang said.

Musk’s initiatives, including Tesla’s self-driving technology, the Optimus humanoid robot, and his xAI startup, represent critical areas of AI innovation. Huang also forecasted a broader industry shift toward artificial intelligence and accelerated computing, stating, “Over the next several years, you’ll see a transition from general-purpose computing to this new era of AI-driven processing.” Huang believes Musk will have a lasting influence on the AI landscape.

FINANCE
China Hits Record Export Highs

China’s exports reached a record high of 25.45 trillion yuan ($3.47 trillion) in 2024, a 7.1% year-on-year increase, providing a boost to the economy amid domestic challenges. Imports rose 2.3%, bringing total trade to a record 43.85 trillion yuan. However, President-elect Donald Trump’s potential 60% tariffs on Chinese goods pose a significant threat to export volumes and economic growth.

Observers attribute the surge to businesses stockpiling ahead of Trump’s term. While China’s economy grew around 5% in 2024, economists warn that additional domestic policy support, such as monetary easing and consumption incentives, is crucial for sustainable recovery. Despite strong export performance, China’s post-pandemic rebound remains fragile, with low inflation and sluggish domestic consumption.

Officials are optimistic about stabilizing economic momentum through easing policies, but external pressures, including trade tensions, could challenge China’s position as a global trade leader in 2025.

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