Trump’s Inflation and AI Are More Important Than the Fed
Microsoft Corp. and OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorized manner by a group linked to Chinese artificial intelligence startup DeepSeek, according to people familiar with the matter. Does it matter though? DeepSeek’s success is a clear sign of weakness in the AI dreams of America’s big tech companies.
Photographer: Andrey Rudakov/BloombergToday, as the Federal Reserve emerges from its latest policy meeting with a well-anticipated stay-put stance, there’s plenty to talk about in financial markets. But most of it isn’t driven by the central bank. It’s almost as if the Fed is an afterthought given the flurry of activity out of the Trump Administration and the DeepSeek AI chatbot out of China, which has dashed some of the belief that big US companies will come to dominate the new technology.
If I had to sum up my analysis of the incoming information, I’d say it has added heavily to downside risk — on inflation, on the chances of an AI bubble bursting, and even on the odds of a recession. So let’s unpack it in the context of the Fed’s decision Wednesday and what that means for financial markets going forward.