💸 Economy

Fed Holds

As expected, the Federal Reserve held interest rates steady this week. This pause comes after a series of cuts in the fall and winter meetings. There were no indications given that an end to quantitative tightening was in sight.

Taken together, The Fed is mostly in “wait and see” mode, though some tightening is being applied through QT.

Trade Wars on All Fronts

This weekend President Trump announced tariffs on Canada, Mexica, and China. They also responded by announcing retaliatory measures. Trump also indicated the European Union would face similar treatment.

These are some of the US’s largest trading partners. Anything more than a brief spat could meaningfully affect the US and global economies.

Tariffs are likely to be passed onto consumers, raising the price of goods. That could bring inflation (and interest rates) back up. On the other hand, if they cause enough disruption, there could be layoffs, plant closures, and a slowdown in economic growth.

🏠 Real Estate

CRE Revival

Blackstone has around $1 trillion dollars in assets under management. That makes their input on markets both interesting and impactful.

The company feels strongly that commercial real estate is recovering. They’re reportedly looking to put their money where their mouth is. Blackstone is reportedly looking to purchase a large share of a giant New York City office building valued somewhere around $1 billion dollars.

Commercial real estate, especially office space, is worth continuing to keep an eye on. While things may be stabilizing, if inflation causes rates to spike there could be more trouble on the horizon.

💡 Startups

DeepLosses

As we covered last week, DeepSeek is a new, high-efficiency AI that can compete with the best US models for a fraction of the cost.

The idea of a future where AI was an affordable, efficient, and less hardware-intensive technology caused major disruption in public markets. In one day, Nvidia’s stock alone lost almost $600 Billion dollars in market capitalization. Other companies related to AI, computer hardware, energy, and data centers also lost value.

Seeking Deep Pockets

Surprisingly, even against that backdrop, there’s still a lot of interest to pour billions of investor dollars into US AI companies.

OpenAI is reportedly in the early phases of trying to raise a staggering $40 Billion dollars in additional funding. They’ll be doing that at a $340 Billion valuation. The company last raised funds at a $157 Billion valuation in October.

🎵 Music Royalties

Spotify Seeks Truce?

Spotify and Universal Music Group have signed a new deal around royalties. Sources indicate that Spotify will pay a higher mechanical royalty rate in the agreement. It’s an interesting turn in Spotify’s evolving - and complicated - relationship with the music industry.

There’s some speculation that the deal could have been motivated, in part, by ongoing legal action or Spotify’s desire to build new features that would require partnership or approval from publishers.

This is great news for anyone under the umbrella of Universal Music Group. They’re going to get paid more. For other major publishers, it’s not hard to imagine them trying to negotiate a similar deal in the near term.

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Sources

Economy - Forbes, Associated Press, Reuters

Real Estate - Reuters

Startups - CNBC, Forbes

Music Royalties - Billboard