The Federal Reserve is widely expected to keep its benchmark interest rate flat when the central bank’s policy committee meets Wednesday.
The Fed has kept interest rates higher than usual all year to counteract inflation, and hasn’t lowered them out of concern President Donald Trump’s tariffs could push up prices for consumers.
Trump has repeatedly criticized the Fed for not cutting rates, and could renew that pressure if the Fed keeps rates flat as expected.
The Federal Reserve is likely to stick to its “wait-and-see” mantra next week, setting it on a collision course with the president.
The Federal Reserve is widely expected to hold its key interest rate steady when the central bank’s policy committee meets Wednesday, possibly provoking more wrath from President Donald Trump, who has repeatedly demand the Fed, which is not under direct control of the White House, cut its benchmark interest rate by an entire percentage point.
Financial markets late Friday were pricing in just a 3% chance of a rate cut this month, according to the CME Group’s FedWatch tool, which forecasts rate movements based on Fed funds futures trading data.
Fed Weighing the Impact of Tariffs
In recent weeks, Fed officials have said they’re reluctant to lower interest rates from their current elevated levels because they’re concerned Trump’s tariffs will reignite the high inflation that has fallen to within shooting distance of the Fed’s target of a 2% annual rate, after surging in the post-pandemic era. For his part, Trump has frequently browbeaten the Fed for not having cut rates this year, going so far as to call Fed Chair Jerome Powell a “numbskull”.
A lower fed funds rate could boost the economy and encourage job creation, but it could also take some of the downward pressure off inflation.
Fed officials have been under a communications “blackout” over the past week in advance of the meeting, but before they went silent, members of the Federal Open Market Committee said they wanted to see how the economy responded to Trump’s tariffs before making any policy moves.
The tariffs pose a dual threat to the Fed’s dual mandate to keep inflation low and employment high: not only could the import taxes push up prices, but they could hurt the economy, potentially pushing up unemployment. If inflation proves the greater threat, the Fed could keep interest rates higher for longer, or alternatively, could cut rates to rescue the economy if the job market starts to crumble.
“No FOMC official has been advocating for a change in policy, so the decision to hold should be easy,” Michael Feroli, chief U.S. economist at JPMorgan Chase, said in a commentary.
The fed funds rate is the Fed’s main tool for carrying out monetary policy and influencing the economy. The rate affects interest rates at which banks lend money to one another, which influences how much interest they charge for car loans, credit cards, and other debt.
The Fed cut the rate to near zero to support the economy with easy money during the pandemic, and cranked it up to a two-decade high starting in 2022 to counteract a surge of inflation, holding it there until late 2024. Last year, the Fed began cutting rates because inflation was cooling, but has kept the rate flat since December after Trump’s election shook up the economic outlook.
Shares of JBS posted a slight gain Friday in their New York Stock Exchange (NYSE) debut after years of complications for the Brazilian meatpacking giant to trade in U.S. public markets.
JBS shares, which have the ticker symbol “JBS,” opened at $13.65 on the New York Stock Exchange and closed just slightly higher at $13.87, after climbing to $14.58 earlier in the session. The shares are dual listed with Brazil’s B3 exchange.
JBS, which is majority owner of U.S. poultry firm Pilgrim’s Pride (PPC), is the world’s largest meatpacker, with 2024 revenue of $77.18 billion and net income of $1.96 billion, according to a prospectus filed in April with the Securities and Exchange Commission.
Both American meat producers and environmentalists had opposed JBS’ attempts to list in the country “because of concerns about corruption settlements, accusations of Amazon deforestation and its growing market share in the United States,” The New York Times reported last year.
However, CNBC reported that after President Donald Trump was re-elected last November, Pilgrim’s Pride donated $5 million to his inauguration committee, and the SEC subsequently approved its request to list on the NYSE.
This article has been updated since it was first published to reflect more recent share price values.
Today is Friday the 13th, a day that’s been considered an “unlucky” day for centuries in Western culture.
Now, a lot of folks may get a little jumpy on Friday the 13th. And the reality is, whether we’re talking about broken mirrors or black cats, it’s easy to see the folly in our own superstitions.
Because the truth is, they’re mostly harmless.
But I’ll tell you one thing. There’s a far more dangerous superstition haunting Wall Street. And it’s emanating from inside the halls of the Federal Reserve.
I like to call it the Inflation Bogeyman.
See, a bogeyman is a mythical creature meant to frighten someone, usually children. Different versions of it have been around in various cultures, but they usually appear when a kid has misbehaved. The idea is to target a specific unwanted act or behavior and then scare the kid into acting right.
I bring this up because, for months, the Fed has been fighting this mythical creature. Warning of its return. Blaming tariffs. Forecasting surges in prices. Hesitating to act while growth slows and markets grow restless.
But here’s the truth nobody inside the Fed seems willing to admit.
This Inflation Bogeyman isn’t real, folks. And those who have been waiting for it to materialize are unfortunately mistaken.
We saw more evidence of that this week in the form of two key inflation reports: the Consumer Price Index (CPI) and the Producer Price Index (PPI).
So, in today’s Market 360, I’ll review the details of these reports and explain what’s really going on. I’ll also give my take on why the Fed has a lot of explaining to do at its meeting next week.
But while most folks are paying attention to the Fed, there’s something else taking place behind the scenes. In fact, this could be one of the most transformative policies in U.S. history.
If my research is correct, this new government fund stands to make a lot of wealth for early investors… and I’ll share how with you today.
The Real Inflation Data Tells a Very Different Story
This week, two critical inflation reports struck another blow to the Fed’s narrative.
The CPI showed headline inflation rose just 2.4% year over year, barely above April’s 2.3%. Month over month, prices increased 0.1%. Core CPI, which strips out food and energy costs, climbed only 2.8% annually – again, below expectations.
This latest CPI reading was below economists’ expectations for the fourth straight month. In other words, these guys can’t hit the broad side of a barn.
Rather than anticipating inflation from the tariffs, the folks at the Fed would be better off by simply looking at the chart below, which shows the reality of the situation…
Digging further into the data:
Food costs rose 0.3%,
Energy costs dipped 1%,
Gasoline plunged 2.6%,
Vehicle prices dropped 0.3% for new cars and 0.5% for used,
Apparel fell 0.4%,
Services rose 0.2%,
And shelter costs (owners’ equivalent rent) ticked up 0.3%. This continues to be the primary inflation catalyst.
Turning to the PPI report, it showed a modest rise, but it was still below expectations.
After two straight months of decline, the PPI rose 0.1% in May, down from the 0.2% increase in April and below expectations for a 0.2% rise. Year over year, the PPI went up 2.6%.
Core PPI, which excludes food, energy and trade margins, also increased 0.1% last month and is up 2.7% in the past year. Economists expected core PPI to rise 0.2%.
If we look further into the report, wholesale service costs rose only 0.1%, and wholesale goods prices were up 0.2%.
What Has to Happen Next
The bottom line is that the data is clear. Inflation continues to fall and defy the expectations of the so-called “experts”. That’s great news, folks.
And this Inflation Bogeyman that they’re so afraid of still hasn’t shown up.
The fact is, they’re anticipating Trump’s tariffs will drive prices higher, but most of those tariffs are still at the 10% baseline. On top of that, a strong U.S. dollar is offsetting much of the impact.
The Fed needs to stop watching for phantom inflation and start looking at the actual data.
The Beige Book says it all. Nine out of twelve Fed districts reported either no growth or outright contraction. And nearly every district is reporting elevated uncertainty that’s already putting the brakes on business and consumer activity.
To be honest, the fact that they’re ignoring the economic data is shocking. The right move would be to cut rates at the next meeting. Even if they don’t cut, any guidance hinting at cuts could spark a relief rally.
My Main Focus Right Now
Now, here’s where things get really interesting for investors like us…
While the Fed keeps debating inflation, another force is already reshaping America’s economy. And it’s happening quietly – outside the headlines most investors are watching.
Specifically, I’m talking about Executive Order 14196.
This little-known order, straight from the desk of the President of the United States, promises to unlock the hidden wealth inside of America – and channel that directly into a select group of companies.
Investors who position themselves early could ride the next wave of growth in this little-watched corner of the market.
That’s why I put together a special briefing explaining how this fund works, where the biggest opportunities are, and how investors can profit as the capital starts flowing into these sectors.
I’ll also tell you how you can gain access to my top three picks that are being fast-tracked to success, thanks to this Executive Order.
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U.S. airline shares dropped Friday after oil prices jumped and flights were disrupted as fighting between Israel and Iran sparked worries of a broad and protracted Middle East conflict.
Shares of American Airlines (AAL), Delta Air Lines (DAL) and United Airlines (UAL) all finished substantially lower, with American off nearly 5%. The US Global JETS ETF (JETS), which includes several airline stocks, fell about 3.5%.
Some other travel stocks, including casino operators and cruise lines, also fell. Read Investopedia’s full coverage of today’s trading here.
According to reports, several Middle East nations had shut their airspace following the initial attacks. Among them were Iran, Iraq, Israel, Jordan, and Syria, according to Bloomberg. Israel attacked Iran’s nuclear program and military leadership, and Iran responded.
According to PYOK, a blog that covers the airline industry, Delta Air Lines and United Airlines “abruptly diverted Tel Aviv-bound flights back to the US on Thursday night” after Israel’s attacks.
This article has been updated since it was first published to include fresh share prices and context.
Shares of Oracle (ORCL) set an all-time high for a second straight session Friday after the enterprise software giant reported fourth-quarter results that topped expectations and spoke of “dramatically higher” revenue growth for the current fiscal year.
After the bell Wednesday, Oracle reported Q4 adjusted earnings per share of $1.70 on revenue that increased 11% year-over-year to $15.90 billion, with both metrics topping consensus estimates of analysts surveyed by Visible Alpha. CEO Safra Catz said, “FY25 was a very good year—but we believe FY26 will be even better as our revenue growth rates will be dramatically higher.”
Oracle shares soared 13% to a record high yesterday, and were leading S&P 500 gainers for a second consecutive day Friday afternoon with an advance of more than 7%. With two hours to go until the closing bell, Oracle stock was trading at $214.57 after earlier climbing as high as $215.14.
The stock has gained about 29% year-to-date, including a 22% cumulative rise since Wednesday’s report.
Canal+ is on an ambitious mission targeting 50 million to 100 million subscribers.
Currently, it boasts nearly 27 million subscribers in 52 countries across three continents.
Last December, the French media and telecom giant listed on the London Stock Exchange, following a spin-off from its parent company, Vivendi, ushering in an independent future to pursue its growth ambitions.
For Canal+, which generated $7.2 billion (about €6.4 billion) in revenue in 2024, Africa and Asia offer high-growth potentials. In Africa, the company is expanding its footprint by acquiring Multichoice Group, the continent’s largest pay TV enterprise.
South Africa’s Competition Commission has authorized the deal valued at $1.9 billion.
Canal+ CEO Maxime Saada called the deal “a major step forward in our ambition to create a global media and entertainment company with Africa at its heart.”
Its timing is ideal for Canal+, which controls a 45% stake in Multichoice and has become increasingly frustrated by the company’s decline.
Multichoice acknowledges facing the most challenging operating conditions in 40 years. At the top of the list is “abnormal currency weakness,” which slashed R7 billion (about $390 million) in profits from its books over the past 18 months. It has also lost close to 4 million subscribers, with the total number currently at 19.3 million in 50 markets.
Canal+ also plans to expand across Asia through its stake in Hong Kong-based Viu. Last June, it paid $300 million to increase its share to 36.8%, and is ultimately targeting 51%.
Canal+ is not the only company stirring the telecom market. In the US, cable providers Charter Communications and Cox Communications have agreed to merge in a deal valued at $34.5 billion. And AT&T has agreed to pay $5.7 billion to acquire Lumen Technologies’ mass market fiber business. In India, the impending listing of Reliance Jio, part of billionaire Mukesh Ambani Reliance Industries empire, could raise $5.3 billion.
Oil futures soared on Friday after Israel attacked Iranian nuclear facilities and Iran retaliated. The violence raised concerns that a larger conflict could disrupt global oil supplies.
Gasoline prices were down 12% year-over-year in May, one of the primary reasons inflation ran just slightly above the Federal Reserve’s 2% target.
Analysts say an escalation that meaningfully disrupts oil trade—like Iran closing the Strait of Hormuz or Israel targeting Iran’s oil infrastructure—is unlikely, and oil prices could settle once tensions ease.
Oil prices soared on Friday as tensions in the Middle East flared following Israel’s attack on Iranian military and nuclear targets and Iran’s response.
West Texas Intermediate (WTI) crude oil futures, the U.S. benchmark, were up about 7.5% at $73.12 a barrel in recent trading Friday, after soaring as much as 14% overnight, crude’s biggest intraday jump in years. Brent crude futures, the global benchmark, were also more than 7% higher at $74.38.
Analysts at JPMorgan warned earlier this week that an all-out conflict between Israel and Iran, one of the world’s largest oil producers, could send oil prices above $100 for the first time since Russia’s invasion of Ukraine disrupted global supply in 2022.
That, in turn, might aggravate inflation at a time when economists are already watching for a tariff-driven resurgence. Ryan Sweet, chief U.S. economist at Oxford Economics, estimates every $10 increase in oil prices would translate into a half-percentage-point increase in the inflation rate, The Wall Street Journal reported Friday.
Lower Oil Prices Help Tamp Down Inflation
Low oil prices have been instrumental in keeping inflation in check this year. The Consumer Price Index (CPI) rose 2.4% year-over-year in May. Inflation would have run further above the Federal Reserve’s 2% target if gas prices hadn’t fallen 12% over the last year. JPMorgan estimates that oil prices at $120 a barrel could push CPI up to 5%.
However, most analysts say the worst-case scenario is unlikely. “The primary market concern lies with Iran potentially closing the Strait of Hormuz,” through which about one-fifth of the world’s oil supply transits, said Kristian Kerr, Head of Macro Strategy at LPL Financial. “We think this is unlikely for now given Iran’s need to maintain oil sales to China,” Kerr added.
There is also the risk that either Israel or Iran targets regional oil infrastructure to escalate the conflict. That would have a meaningful impact on global oil supply and, thus, gas prices.
Barring such an escalation, experts predict oil prices will settle after Friday’s surge. Goldman Sachs analysts on Friday acknowledged that the conflict would boost oil’s risk premium in the near term, but maintained their prediction that WTI will trade around $55 a barrel at the end of the year.
This article has been updated since it was first published to reflect new market data.
AI’s huge appetite for computing power is fueling a global data-center ramp-up. Investors and builders are counting on the boom to continue.
Not since the height of the industrial revolution have we seen the level of demand for infrastructure capacity that the artificial intelligence boom has created. It’s estimated that roughly 10 times the computing power is needed to conduct a ChatGP search compared to a regular Google search. According to Goldman Sachs, we can expect AI power demand to increase by 165% by 2030; McKinsey forecasts that in Europe alone, meeting the new IT load demand will require between $250 billion to $300 billion of investment, excluding power generation capacity.
AI’s insatiable appetite for computing power, coupled with the current demand/supply conditions for cloud-based AI workflows/use cases, has supercharged the pace of investment and development of data centers. A data center is a facility housing cloud computing and storage resources that enable the delivery of software applications, the training of AI, and any number of additional processing and production applications.
Currently, the US is leading the AI power race, having built the largest number of data centers in the world. Statista reports that as of March, the US was home to 5,426 facilities, followed by Germany with 529, the UK with 523, and China with 449. By 2030, these numbers are expected to increase by about 30-40%. Globally, investment in data centers is forecast to reach $7 trillion.
Land And Power
How does the investment needed to build a data center break down?
“If someone owns a land parcel where data-center development is feasible, then the value of that land is significantly higher than it would be absent that demand,” says Tim McGuire, senior director of Project Finance at Rowan Digital Infrastructure, a developer and builder of data centers in the US. “For example, we see land in core markets like Northern Virginia exceed $2.5 million an acre, and to fit a hyperscaler development—Amazon Web Services, Google, Microsoft—we’re typically buying a hundred acres plus.”
Tim McGuire, Senior Director of Project Finance, Rowan Digital Infrastructure
Energy and water are both crucial cost components, and energy has been the gating issue in most geographies, McGuire adds.
“Data centers are very energy intensive,” he notes, “and even if the energy infrastructure is there to power them, building an interconnection can take months if not years. The cost of building those interconnections can be high. We’re therefore seeing more and more utilities—particularly utilities where the data center boom has really put strain on them—require some form of security for them to undertake the interconnection work.”
Well-capitalized developers that can afford to meet those requirements, have the advantage he says.
The dynamics related to power availability are different for data centers, observes Gordon Bell, principal at EY-Parthenon Digital Infrastructure. “Europe is particularly challenged with respect to power availability, given some of the local regulatory hurdles around expanding the power infrastructure,” he says. “The same thing is also true in North America, whereas in Asia it is relatively fast to build out that infrastructure.”
Graphic processing units (GPUs) are essential for all things AI, and some countries face further restrictions to data center development depending on how many GPUs they can import at any one time, Bell adds.
“Countries like Canada, Japan, Australia, and many in Europe don’t have restrictions on GPU imports,” he says, “which has created another catalyst for growth in the market in those regions.”
Also, different countries will offer specific incentives around the development of data centers. Some Middle Eastern countries, including the United Arab Emirates, are aggressively incentivizing data center development within their borders, he adds.
Financing Data Centers
Because building a data center is extremely capital intensive, backers are typically global companies like Blackstone, notes Claus Hertel, managing director at Rabobank, an active lender in the space and developer of its own green data center in the Netherlands. A lot of investors and lenders have relationships with these big firms and have assembled large project finance teams that are active in renewables, clean tech, and digital infrastructure.
Claus Hertel, Managing Director, Rabobank
“At the basic level, you have project financing, which incorporates construction, financing, and term financing,” Hertel says. “Once the data center is complete, you have a certain amount of time—typically a three- to four-year period—where the sponsor can decide how to access permanent capital or permanent financing. That could be in the form of asset-backed securities, commercial mortgage-backed securities, or a private placement to long-term investors. So there are different pockets of capital, short-term or longer term.”
Like many of its peers, Rowan Digital Infrastructure is sponsored by a private equity firm, Tim McGuire says.
“Typically, a private equity investor will front some of the pre-development costs, which could include acquiring the land parcel and doing some of the horizontal development,” he notes. “Rowan doesn’t put debt financing in place for projects until we have a signed lease, because at that point, we’re able to obtain very attractive terms. The hyperscaler customers are large, well-capitalized, profitable public companies with high investment-grade credit ratings. After signing a long-term lease with them, it opens low-cost debt capital that provides 80% to 85% of the capital needed to build the project.”
The Future Of Data-Center Investing
“The context for all of this is that the industry has grown tremendously over the last couple of years, and it’s expected to accelerate going forward,” says Gordon Bell. “That just requires more and more capital—more capital than a lot of the existing owners of these assets originally underwrote. They’re looking for ways to raise new capital as well as recycle capital.”
One of the possible solutions that is starting to percolate in the market, he says, is the introduction of dedicated funds that hold a portfolio of stabilized assets.
“That would then provide some diversification of risk and allow various investors looking to get exposure into the space to invest in a fund that holds a portfolio of assets across different markets and different customer,” he says.
“Typically, the stabilized asset deals that we’ve seen are for individual facilities or a handful of individual facilities,” he adds. “Those facilities provide exposure to very specific markets and within each of those facilities there’s oftentimes only a single customer. So, you’re placing a concentrated bet on a single customer and a single market. The private equity deals that have been made thus far have been more one off in nature, a handful of assets, or single assets. It’s not been anything that can programmatically scale globally, which is really what the industry eventually needs—a fund that would hold all these stabilized assets. Investors looking to get exposure into stabilized assets would then just be able to invest into this fund.”
Whatever the mechanism that gets it done, McGuire sees continued strong demand for data center development going forward, driven by continued investment from hyperscalers. AI will be a catalyst, but so will demand for cloud services.
“There’s a lot of support for the data center business for the foreseeable future,” he predicts.
Core retail sales rose 4.2% year-over-year in May, according to the National Retail Federation, which shared its estimates ahead of the government’s scheduled retail sales release next week.
Spending growth has slowed, but the trade group warned that consumer spending is shifting amid economic uncertainty.
Retailers are trying to suss out how their customers will respond to evolving trade policies and economic conditions.
Retail sales grew in May, according to a fresh analysis, but uncertainty is shifting consumer behavior, leaving retailers eager to pinpoint where it’s headed.
Core retail sales—which excludes restaurant, car and gas spending—rose about 0.2% from April to May, and 4.2% from a year earlier, the National Retail Federation said Friday. Spending growth has slowed, which the trade group said in part reflects fewer consumers stocking up on goods in an attempt to beat tariff-fueled price increases.
“While momentum remains, the nature of consumer spending is shifting as economic uncertainty increases,” NRF President Matthew Shay said in a press release. “Consumer fundamentals haven’t been damaged yet, and a slowing-but-still-growing job market is supporting household priorities ahead of any meaningful price increases in the coming months.”
Spending on digital products, such as games and books, shot up about 28% year-over-year in May, and sporting goods sales rose 8.2%, the NRF said. But sales at building and garden supply stores fell 7.3% over the past year, it said. The federal government is slated to release its own retail sales figures for May on Tuesday.
The University of Michigan’s Index of Consumer Sentiment rose 16% from May to June—marking the first increase in six months. Unease about the economy remains high by historical standards, but has come down as the White House has moderated its stance on tariffs.
Under a proposed trade deal with China, President Donald Trump may keep tariffs on Chinese exports at the current level, rather than the prior 145% tax. The U.S. may also maintain 10% tariffs on goods from a number of trading partners past July, when higher import taxes are slated to go into effect, officials said.
A number of retailers are searching for signals on how consumers will respond to the latest twists in domestic trade policy. Shoppers have been relatively cautious, apparel companies J.Jill (JILL) and Oxford Industries (OXM) said on earnings conference calls this week.
“Concern about the impact of tariffs on prices in the economy is exacerbating weak consumer sentiment,” Oxford Industries CEO Thomas Caldecot Chubb III said, according to a transcript made available by AlphaSense.
Assessments are complicated by the fact that Americans endured years of high inflation, beginning amid the pandemic, said Howard Friedman, CEO of Utz Brands (UTZ), which sells chips, pretzels and other snacks.
“The consumer may be taking a little bit of a break,” Friedman said at a conference this week.
