Latinos In Real Estate Investing Podcast

Federal Reserve Decisions, JPMorgan Stock Sale, and AI Regulation | Weekly Business Briefs w/ Martin Perdomo

November 01, 2023 Martin Perdomo "The Elite Strategist" Season 2 Episode 318
Latinos In Real Estate Investing Podcast
Federal Reserve Decisions, JPMorgan Stock Sale, and AI Regulation | Weekly Business Briefs w/ Martin Perdomo
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Show Notes Transcript Chapter Markers

Imagine if the Federal Reserve's decision to pause interest rate hikes could potentially put more money into your pocket. That's exactly what we're delving into today, along with the impact of JPMorgan Chase CEO Jamie Dimon's sale of one million shares of his own company. Could this be indicating his retirement or something more concerning about the health of the banking industry? We'll be dissecting these key financial events and exploring their potential ramifications for the economy.

Switching gears into the realm of artificial intelligence, we'll be discussing President Biden's recent executive order on AI. Is this the dawn of a new era of innovation or is it a hurdle for businesses, particularly the giants of the social media world? But the million-dollar question here is - can laws truly regulate AI? We'll be navigating the complexities of this topic and examining the challenges and opportunities of AI regulation. So, strap in for an enlightening discussion as we unravel these substantial business events and their potential ripple effects on the economy.

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Speaker 0:

The feds probably won't cut interest rates just yet, but its next move is expected to be a good for Americans. Jpmorgan stocks are slipping and Biden makes serious artificial intelligence regulation moves. These are the top three headlines in this week's weekly business brief. First up the year is coming to a close and it looks like the Federal Reserve's war against inflation is finally easing up. According to the Business Insider, on Wednesday the Fed Open Market Committee is expected to announce its next interest rate decision and a hike probably isn't in the cards. The CME Fed Watch Tool, which analyzes various derivative prices to estimate possibilities for interest rate changes, predict a 98% chance the Fed will continue to pause rate hikes, with a 2% chance it'll cut rates as of Monday afternoon. In September, the feds paused interest rate hikes as they continued to receive promising data on the country's economic recovery. Since then, the good news has continued. The US added 336,000 jobs in September and the Consumer Price Index, which measures inflation, grew 3.7% year over year in the same month, holding steady from August and well below its high point last year. Secretary-chair Jay Powell said during the September press conference that, as the central bank continues its mission of reaching its 2% inflation target, we are fairly close to where we need to get to. We need to get to a place where the confidence that we have as stands, that will bring inflation down to 2% over time. Powell said that's what we need to get to. We've been moving toward it. As we've gotten closer to it, we've slowed the pace at which we've moved. I think that was appropriate and now that we're getting closer, we have the ability to proceed carefully. I think that they know that they're really close to breaking something in the economy. I think they've pushed the rates high enough already and they know something is going to break at these rates. But we'll have to wait and see. It is a good sign that they are slowing down on these interest rate hikes. I hope that next year sometimes they start easing up and bringing the rates down a little bit. I know there are many that say, hey, we need to hold for longer. It's good for the economy. It's going to be very painful for many, many Americans with credit cards rates going up, many of you already experiencing your monthly payments going through the roof, as credit card debt is not fixed debt and those interest rates are valuable. We're also seeing student loans. They're starting to come due. They started coming due in October. One last thing that's coming up is, as of November 1st, the COVID foreclosure moratoriums are finally lifted and banks can start foreclosing. So, with all of that being said, maybe possibly the reason the feds are not being so hawkish anymore on raising interest rates is because of all of the circumstances around the economy. And yet they try to tell us that the US job we added all these jobs and all these things are more of a little bit like to keep on edge on what the government likes to give us and as it pertains to information. However, we'll have to wait and see and we'll just keep moving Next up. Jpmorgan Chase stocks slip after bank says CEO Jamie Dimon is selling one million shares, reported CNBC. Jpmorgan Chase CEO Jamie Dimon will begin to sell one million shares of the bank he runs next year, the company said Friday in a filing. The plans sparked concern that Diamond, 67, could be contemplating retirement. Diamond is arguably the country's top banker. He has led JPMorgan since 2005, helping build it into the biggest and most profitable American bank. His stewardship included navigating JPMorgan through two banking crisis, helping stabilize the industry by acquiring failed banks. Before now, diamond has never sold shares of JPMorgan, except for technical reasons such as exercising options. He has also spent his own money snapping up JPMorgan shares. In the past, shares of the bank slipped 3.6%, worse than 2.3% decline of KBW Bank Index. This is a reminder that the CEO is getting closer to retirement. Wells Fargo analysts, mike Mayo, said in a note Diamond may transition from his current role in about three and a half years if prior statements prove accurate. Mayo added. A spokesperson for the New York-based bank said the move wasn't related to a succession planning and that Diamond has no current plans for another sale, though his needs could change over time. I don't know, guys. You know, when it comes to bankers and the banking industry, they have a track record of not being a trustworthy industry. I'm not saying that Jamie Diamond isn't trustworthy. I'm just saying that if Jamie Diamond is selling one million shares of his own bank that he works for, yes, there is the possibility exist that he is planning on retirement. However, the possibility also exists that he knows something that the rest of us don't know and he's starting to bail out. But I guess we'll see history, the future will tell us and we'll be able to look back and see which one is it. For myself, I tend to be a little bit paranoid, as when bankers make big moves like this, it just puts my flags up and puts me on alert like, hey, what do you know that we don't know? Remember, these guys have access to information. I mean, the biggest bank in the world in the country at least and JP Morgan's the biggest bank in America. What does he know that we don't know? And why is he selling so many shares? And that's concerning to me. There's a lot of data points in the economy. The economy is not as well as I don't believe the economy is as well as they are trying to tell us it is. Lastly, biden issues US first artificial intelligence executive order. According to Al Jazeera, to realize the promise of AI and avoid the risk, we need to govern this technology, said Biden on Thursday. In the wrong hands, AI can make it easier for hackers to exploit vulnerabilities in the software that makes our society run. The executive order includes a provision that developers of the most powerful AI models must notify the government of their work and share safety test results. It also calls on the National Institute of Standards and Technology to establish rigorous standards for testing AI prior to its release. The Department of Commerce to develop guidelines for identifying AI-generated content, and agencies funding life science projects to establish strong new standards of biological synthesis screening to ensure AI cannot engineer biohazard. Biden also called on Congress to pass data privacy legislation and for the Department of Justice to address algorithmic discrimination among landlords and federal benefit programs. White House Deputy Chief of Staff, ruth Reed, hailed the measure as the strongest set of actions any government in the world has ever taken on AI safety, security and trust and the next step in aggressive strategy to do everything on all fronts to harness the benefits of AI and mitigate the risk. I personally think that this is a good thing. Ai could turn into something wild if it's not regulated. However, the other side to that is that we know that a lot of times, where the government puts their hands in, they tend to hurt innovation, and so we'll see where this one goes. I think this is good. I think AI needs some sort of regulation, just like I also believe that the social media companies need some sort of regulation, and what they allow and what they don't allow. So this is a very complex subject to navigate and we'll see where this goes and let me know what do you think. Do you think these laws can actually regulate AI. And this has been your weekly business brief. I'll see you guys next week. Peace.

Federal Reserve, JPMorgan Stocks, AI Regulation
Regulating AI in Business