Davide Romeo

The Federal Reserve made its first cut of the year, lowering the federal funds rate by 25 basis points to a range from 4.00% to 4.25%. More revealing than the move itself, policymakers now project two additional cuts by year-end, three in total compared with roughly two a quarter ago. The tone is clearly more supportive. A Board Tilting Dovish Signals from the vote point to a softer stance ahead. One member projected an end-2025 policy rate around 2.75% to 3.00%, which implies several more cuts. With further changes expected on the Board over the next year and a half, the overall posture may continue to lean more accommodative. Source: Federal Reserve Powell Prioritizes Jobs Heading into the meeting, the choice was whether to lean harder against sticky inflation, helped recently by tariffs, or to cushion a cooling labor market. Chair Powell chose to protect employment and guide policy toward a neutral rate near 3%. His remarks emphasized jobs and growth more than inflation, which m...

The latest "core" PCE inflation data, the Federal Reserve's preferred gauge for assessing inflation, exceeded expectations, rising 2.8% annually compared to the anticipated 2.7%. Simultaneously, the revised U.S. consumer confidence index dropped to 57 from an initial reading of 57.9—the lowest level since 2022. These developments, combined with recently announced tariffs and additional ones expected on April 2nd, heightened fears of stagflation among investors. As a result, major indices took a significant hit, with the S&P 500 falling by 2% and the Nasdaq down by 3%. This explains the flattening yield curve, as the U.S. 10-year yield, linked closely to economic outlooks, dropped 12 basis points to 4.25%, and the 2-year yield, tied more to Fed policy expectations, fell by 9 basis points to 3.91%. This scenario signals a challenging future for the Federal Reserve as it navigates between persistent inflation and slowing economic growth. However, part of this inflationar...

On January 27th, the financial world was taken by surprise as Chinese tech startup DeepSeek unveiled its R1 model, an AI system touted as low-cost yet highly capable, causing a dramatic ripple across markets. The Rise of DeepSeek DeepSeek, founded by Liang Wenfeng—a hedge fund manager who pivoted in 2021 to invest his financial gains into Nvidia chips and recruit China’s top AI talent—has positioned itself as a significant contender in the global AI arena. The company's mission: to rival American tech giants’ AI systems with more affordable and efficient alternatives.  (Photo: Chinatalk Media | Sohu) After the news, the S&P 500 plummeted over 2%, with tech stocks bearing the brunt of the selloff (-6%), fueled by fears of an impending price war in the AI sector. Analysts have already dubbed DeepSeek "the Temu of ChatGPT," suggesting its products could rival Silicon Valley giants' offerings at a fraction of the cost. Indeed, DeepSeek’s R1 surpasses ChatGPT in mathem...

Donald Trump has officially become the 47th President of the United States. The new administration is expected to act swiftly, leveraging executive orders (comparable to legislative decrees in other systems), which take immediate effect and bypass the traditional legislative process, including Congressional approval. "I will act with historic speed and strength and fix every single crisis facing our country," declared the newly elected President.  Evan Vucci/AP Key Priorities of the Trump Administration Immigration Reduction: Expected to lead to immediate wage pressures as companies struggle to find lower-cost labor, potentially driving inflation higher. A similar market dynamic was observed in the UK post-Brexit, where reduced immigration contributed to "stickier" inflation, with average inflation remaining higher compared to the EU since the start of the war. This forced the Bank of England to implement more aggressive measures to control price growth.  Tariff Inc...

The U.S. inflation report for December, released on January 15th, presented mixed signals but has been positively received by the markets. Consumer prices rose by 2.9% year-over-year , aligning with economists' expectations and accelerating from the 2.7% recorded in the previous month. However, monthly inflation surprised to the upside, increasing by 0.4% compared to November, exceeding the 0.3% forecast.  On a brighter note, core inflation (excluding volatile energy and food prices) came in below expectations. It posted a 3.2% year-over-year increase , down from both the 3.3% anticipated by economists and the prior month’s reading. On a monthly basis, core inflation rose by 0.2% , which was in line with forecasts. The main drivers of price increases were used vehicles and transportation services , trends already evident in the day before producer price index (PPI), which, despite coming in below expectations, had limited impact on market sentiment.  While housing costs ...

Annabelle Chih / Bloomberg / Contributor / Getty Images Yesterday, quantum computing companies faced a sudden and dramatic crash, losing nearly half their value and wiping out approximately $20 billion in market capitalization. The catalyst for this sell-off was Jensen Huang, CEO of Nvidia, whose remarks at CES in Las Vegas highlighted how far we still are from the practical application of quantum computing technology.  Huang stated, “If you were to say 15 years, that might be a little too soon. If you said 30, that might be a little too late. But if you picked 20, I think a good number of us would agree with that.” He also emphasized that quantum computers are not a one-size-fits-all solution. While they have immense computational potential, their ability to process data is still highly limited given current technological constraints. These comments sent shockwaves through the quantum computing sector. Companies like Rigetti Computing (-45%), Quantum Computing Inc. (-43%), IonQ...