The first meeting of the year for the US central bank is set to unfold today, with widespread anticipation that the key interest rate will remain unchanged. This decision comes as the Federal Reserve navigates a complex economic landscape, marked by a weakening job market potentially influenced by the rise of artificial intelligence, while inflation remains stubbornly above the desired 2 percent target.

As Federal Reserve Chairman Jay Powell approaches the end of his term in mid-May, he faces mounting pressure from the White House. The administration is eager to see a reduction in the current official rates, which sit between 3.5 percent and 3.75 percent. This eagerness is creating tension, with President Trump actively challenging and attempting to circumvent the Fed’s monetary policies.

Adding to the political drama, the Justice Department recently launched an investigation into allegations of false testimony regarding the renovation expenses of the central bank’s Washington estate. Meanwhile, the Supreme Court is reviewing whether President Trump overstepped his authority in his efforts to remove independent Fed board member Lisa Cook from her position.

In this charged atmosphere, Powell and his divided group of rate-setters find themselves in a tight balancing act, striving to address both economic and political challenges as they steer the nation’s monetary policy.

The Justice Department opened a probe earlier this month into allegations of falsified testimony on the renovation cost of the central bank’s Washington estate. 

The Supreme Court is studying whether Trump exceeded his power in seeking to remove independent Fed board member Lisa Cook from her post.

Stepping down: US Federal Reserve chairman Jay Powell (pictured), who has been under fire from President Trump, will end his term in mid-May

So far it appears reluctant to challenge her presence.

Trump is also seeking to bring the cost of borrowing down directly by limiting the interest charge on credit cards to 10 per cent. 

It is a policy that has drawn a bitter response from leading bankers, including JP Morgan’s Jamie Dimon, who opposes such strictures from Washington.

The votes of existing board member Christopher Waller will be closely watched, as he is one of the candidates to have been interviewed for Powell’s job.

There has been much focus in the last few days on the emergence of BlackRock executive Rick Rieder as a potential chairman. 

Volatility in the bond markets and a tumbling dollar have helped make the case for a leader who understands Wall Street and global markets.

For the moment, Trump is silenced, but this choice, arguably the most important of his presidency, could be blurted out at any time.

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Blowing bubbles

Great celebrations this week that British AI video platform Synthesia raised a $200million tranche of new capital, putting a value of $4billion (£3billion) on the enterprise. Cheerleaders for creative Britain and its AI skills should be delighted.

The fund raise, led by Google Ventures, evoked support from the Chancellor Rachel Reeves, who hailed it as a ‘UK success story’, and Business Secretary Peter Kyle who saw it as a ‘powerful example’ of Britain’s global leadership in AI.

Founded by Victor Riparbelli, the company aims to transform the corporate video space by moving from one-way static content to something more interactive and conversational, powered by AI agents. 

Technology is moving ahead by leaps and bounds. In the current AI world, where just mentioning artificial intelligence appears to be worth hundreds of dollars, Synthesia looks like the real thing.

Nevertheless, those of us who have to deal with computer bots on the websites of banks, insurers and other groups might have their doubts. 

There is already high-flown talk of Synthesia going public, yet one must have doubts about its ability to scale up production and the size of the market involved. 

Moreover, do people assessing corporate content really want to deal with AI agents, rather than human analysts and experts? 

Less remarked upon in the bubbly publicity was that in 2024 Synthesia generated revenues of £43million and made a loss. When it comes to new tech, revenue growth is the preferred metric.

But can it really be the case that Synthesia is worth the same as one of Britain’s truly great creative media giants ITV, with some of the most admired studio production on the planet?

Much of the focus on the AI bubble has been on stratospheric deals such as Nvidia’s $100billion commitment to OpenAI.

One cannot help but think that deals being done lower down the food chain are producing some exaggerated values.

Swing votes

Jefferies is a wonderful investment bank that keeps financial players and journalists up to date with a stream of analysis. 

But one could do without the endless campaigning for votes in categories for excellence for the Extel analysts’ awards. 

Deserving as the candidates may be, it is irritating and could be seen as seeking to manipulate outcomes.

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