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Dow closes down over 1,000 points as Fed leaves rates unchanged · THE DAILY BRIEF

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  Speaker 1: Despite energy's price spikes caused by the Iran War and
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  Speaker 1: persistently high inflation, the Federal Reserve has decided to hold
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  Speaker 1: interest rates steady at around three point six percent. It's
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  Speaker 1: the fifth straight meeting where the Fed left interest rates unchanged. Meanwhile,
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  Speaker 1: stocks tumbled, with the Dow closing down over one thousand
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  Speaker 1: points today. Let's take a look at our interactive stock
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  Speaker 1: market heat map brought to you by Finnviz, which shows
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  Speaker 1: the top five hundred stocks. A lot of red, some
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  Speaker 1: deep red there on the board. These were the highly
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  Speaker 1: anticipated tech earnings reports this week that's driving some of
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  Speaker 1: these results. Let's go to CBS News Money Watch correspondent
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  Speaker 1: Kelly O'Grady who's at the New York Stock Exchange for US. Kelly,
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  Speaker 1: the vote was nine to three, and Fair chair Kevin
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  Speaker 1: Warsh called it a good family fight. So how did
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  Speaker 1: the Fed come to this decision?
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  Speaker 2: Yeah, I wonder when that family fight is going to
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  Speaker 2: turn into Thanksgiving family blowout. Well, look what he said was,
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  Speaker 2: you know, the mandate of keeping a full employment in
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  Speaker 2: the job market that's still going pretty well, and yes
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  Speaker 2: there's some inflation concerns, but it's not out of control.
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  Speaker 2: Here's a little bit of what he had to say
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  Speaker 2: explaining the decision.
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  Speaker 3: The economy is showing impressive resilience even with recent shocks.
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  Speaker 3: The trends are positive and reveal solid growth. Job gains
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  Speaker 3: have kept pace with the workforce, and the unemployment rate
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  Speaker 3: has changed little. Inflation remains elevated relative to the committee's
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  Speaker 3: two percent goal. The Committee remains resolute. You've heard this before,
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  Speaker 3: but we will deliver price stability.
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  Speaker 2: So you know, you hear him straddling both sides of
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  Speaker 2: the FEDS mandate. That being said, you know, this was
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  Speaker 2: not a comfortable decision. Nine to three, three people voted
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  Speaker 2: on that board to hike interest rates by a quarter
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  Speaker 2: of a percentage point. And I Wish was really pressed
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  Speaker 2: that if we continue to see oil prices rise, energy
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  Speaker 2: prices rise, and then that continue to push inflation higher,
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  Speaker 2: with all this instability over in the Middle East, what
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  Speaker 2: are you going to do?
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  Speaker 1: Right?
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  Speaker 2: They've got another meeting in September, and he did not
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  Speaker 2: rule out a hike. He said, you know, there's going
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  Speaker 2: to be a number of factors that go into this decision.
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  Speaker 2: He doesn't want to telegraph anything. The situation is changing
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  Speaker 2: very quickly, but I think that's part of what drove
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  Speaker 2: the market down, in addition to high oil prices those
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  Speaker 2: tech earnings. Later, it was this trepidation that could we
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  Speaker 2: be looking at a September interest rate hike, especially because
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  Speaker 2: three people on that committee are already saying not if,
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  Speaker 2: but when so?
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  Speaker 1: So Kelly, what do we know given the Fed's decision
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  Speaker 1: and all the information that you just laid out, what
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  Speaker 1: does that mean for the economy today and consumers? Is
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  Speaker 1: it kind of same old, same old?
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  Speaker 2: So for right now, Yes, when it comes to interest rates,
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  Speaker 2: because there was no change. You know, you're borrowing costs,
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  Speaker 2: if you're going out and you're getting a loan at
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  Speaker 2: the bank, it doesn't change because that benchmark interest rate
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  Speaker 2: didn't change. That being said, I was tracking the bond market,
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  Speaker 2: the ten year Treasury, and after that press conference you
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  Speaker 2: actually started to see it tick up. And what does
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  Speaker 2: that tell you? That actually means that investors are betting
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  Speaker 2: on a September interest rate hike because the Treasury tracks,
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  Speaker 2: or the Treasury rate tracks where investors think inflation and
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  Speaker 2: therefore interest rates are going. Why is that important because
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  Speaker 2: that is what drives mortgage rates, and we're all out
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  Speaker 2: here going when are mortgage rates going down, and so
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  Speaker 2: I think for consumers, you're not going to see mortgage
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  Speaker 2: rates come down anytime soon.
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  Speaker 1: They're either going to stay flat or.
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  Speaker 2: Even potentially elevate the back half of the year because
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  Speaker 2: of this consideration that there could be interest rate hikes coming.
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  Speaker 2: But in the very next few weeks, nothing really changes.
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  Speaker 1: And Kelly, open Ai CEO Sam Alman in DC today
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  Speaker 1: meeting with Trump administration officials and lawmakers now. The day
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  Speaker 1: before his visit, though, more than one thousand UH employees
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  Speaker 1: from the biggest AI companies, including open Ai, urged the
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  Speaker 1: US government to slow the pace of AI development until
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  Speaker 1: safety and security measures are firmly in place. CBS News
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  Speaker 1: caught up with Altman before his meetings. Take a listen
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  Speaker 1: to that. What's your message to Congress today? We're just
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  Speaker 1: here too. Did you see that open letter from the
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  Speaker 1: researchers across many companies calling you guys to piece progress. Yeah,
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  Speaker 1: and what's your reaction to that letter. We agree on
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  Speaker 1: a lot of the principles of that and many of
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  Speaker 1: our youse switchers signed it and were involved in Jeff, Now, Kelly,
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  Speaker 1: these meetings come as all eyes are on tech companies
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  Speaker 1: and they're spending on AI. So what do we expect
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  Speaker 1: from their earnings reports this week?
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  Speaker 2: Yeah, well you can expect the market to go like
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  Speaker 2: this It always does around tech earnings because you've got Meta, Microsoft, Amazon,
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  Speaker 2: and Apple, four of the biggest companies on the stock
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  Speaker 2: market reporting over the next twenty.
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  Speaker 3: Four hours or so.
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  Speaker 2: So two things I'm looking for. One, how these companies
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  Speaker 2: are talking about how much they are spending on artificial
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  Speaker 2: intelligence development. That has caused investors a lot of concern
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  Speaker 2: over the past year or so that you see these
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  Speaker 2: companies investing in data centers, investing in new technology, but
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  Speaker 2: not making money from it yet in a meaningful way.
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  Speaker 2: So that's going to be one thing that we're tracking.
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  Speaker 2: That's more of the immediate So what Then there's the
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  Speaker 2: broader existential question which gets at what Sam Altman was
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  Speaker 2: having to address in that open letter of are we
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  Speaker 2: moving too quickly? Remember open AIS model that was not
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  Speaker 2: released to the public yet was conducting an experiment, was
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  Speaker 2: conducting a test and actually got out of the secure
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  Speaker 2: environment and went and hacked a real company on the
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  Speaker 2: open market, and that has really given a moment of
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  Speaker 2: pause of oh, wow, are we are we putting the
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  Speaker 2: cart before the horse here in terms of regulations and security.
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  Speaker 2: I think you're going to hear a lot of people.
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  Speaker 2: We have a lot of reporters on these calls that
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  Speaker 2: are always pressing the CEOs the CFOs on a number
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  Speaker 2: of different questions. I think you're going to hear folks
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  Speaker 2: have to address that question as well as the more
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  Speaker 2: immediate how are you going to make money?
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  Speaker 1: Liz Kelly O. Grady, Thanks so much.