Member Briefing January 30, 2025
Many Feared Dead After Plane Carrying 64 Collides With Black Hawk Helicopter Near D.C
Emergency responders are searching for survivors after a midair collision involving an American Airlines regional jet flying from Wichita, Kan., and a military helicopter near Ronald Reagan Washington National Airport. The collision occurred moments before the jet was set to land, sending both aircraft into the Potomac River.
Read more at ESPN (US Figure Skaters, Coaches and Families among the passengers)
Fed Stands Pat on Rates, Enters Wait-and-See Phase
The Federal Reserve hit the pause button on recent interest rate cuts, entering a new wait-and-see phase as it tries to determine whether and how much more to lower rates from a recent two-decade high. The decision on Wednesday to leave the benchmark federal-funds rate at its current range around 4.3% followed three consecutive rate cuts beginning in September, when the rate stood around 5.3%.
Fed officials face two broad questions in the weeks and months to come. First, is price growth slowing in a way that will reach the Fed’s goal of 2% inflation in the next year or two, as officials anticipate? Second, to what degree are interest rates and broader financial conditions restraining economic activity? Minutes from the Fed’s previous meeting, released earlier this month, said a substantial majority of officials still judged their policy stance at the time to be “meaningfully restrictive.”
OpenAI Warns DeepSeek 'Distilled' Its AI Models, Reports
The Financial Times reported that OpenAI found evidence of "distillation," a technique that enhances smaller models by leveraging outputs from larger, more advanced ones. OpenAI suspects DeepSeek employed this method to replicate its technology at a lower cost, further intensifying scrutiny over AI model security and competitive ethics. The case highlights growing concerns over AI intellectual property theft and the risks posed by foreign firms leveraging U.S.-developed technology. If OpenAI's allegations are substantiated, it could lead to significant regulatory and national security implications for AI research and development.
Meanwhile Chinese tech giant Alibaba introduced a new version of its AI model, Qwen 2.5, asserting that it outperforms the highly regarded DeepSeek-V3. The timing of the Qwen 2.5-Max launch, coinciding with the first day of the Lunar New Year—a time when most Chinese are on holiday with their families—highlights the pressure brought by DeepSeek’s meteoric rise over the past three weeks. This surge has not only impacted foreign competitors but also intensified the race among domestic AI firms.
Read More at Newsweek and FXLeaders
Mortgage Demand Drops Further, Even As Interest Rates Settle
Mortgage rates didn’t move last week, but demand for new home loans continued to weaken. Both homebuyers and current homeowners are hampered by today’s higher interest rates. Total mortgage application volume decreased 2% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) remained unchanged at 7.02%, with points increasing to 0.63 from 0.62 (including the origination fee) for loans with a 20% down payment.
Applications to refinance a home loan dropped 7% for the week and were 5% higher than the same week one year ago. Interest rates are now 24 basis points higher than they were a year ago, so there are precious few who can benefit. The vast majority of homeowners have mortgages with rates well below what is being offered today. Applications for a mortgage to purchase a home fell 0.4% from one week earlier and were 7% lower than the same week one year ago.
Global Headlines
Middle East
- Israel Says Three Israeli And Five Thai Hostages To Be Released In Gaza Thursday – CNN
- US, UK Ships Return to Red Sea After Houthis Vow to Hold Fire - Bloomberg
- F-16s Have Been Using Laser-Guided Rockets To Shoot Down Houthi Drones – The Warzone
- Israel's Netanyahu Invited To Meet Trump At White House Next Week - BBC
- Sisi Says Egypt Will Not Take Part In 'Act Of Injustice' Displacing Palestinians - Reuters
- Syria Asks Russia For Reparations – Financial Times
- Gaza Ceasefire Is 'Beginning Of Difficult Healing Journey', Mental Health Worker Says – France 24
- Trump Middle East Envoy Witkoff Makes Rare Trip by U.S. Official to Gaza - WSJ
- Iran’s Alarming Nuclear Dash Will Soon Test Donald Trump – The Economist
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Russia Confirms Capture Of Australian Who Fought For Ukraine – The Independent
- Massive Ukrainian Drone Attack Targets Russian Power, Oil Facilities – France 24
- In A Split Second, Russia Wipes Out Three Generations Of A Ukrainian Family - BBC
- Romania Scrambles F-16 Fighter Jets After Russian Attack on Ukraine - Newsweek
- Putin says peace talks with Ukraine possible, but not with Zelensky – France 24
- Holocaust Survivor Says Germany Must Help Ukraine – Barron’s
- Suicidal Tendencies And ’80s Battlefield Tactics: How North Korean Soldiers Are Operating In Russia’s War On Ukraine - CNN
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- Welcoming The Lunar New Year In Pictures - BBC
- Several People Are Feared Dead In A Stampede At Massive Festival In India - NPR
- European Central Bank To Cut Rates Again With Trump Threat And U.S. Divergence In Focus - CNBC
- Mona Lisa To Be Moved As Part Of Major Louvre Overhaul - BBC
- Argentina Lifts Tariffs On Low-Cost EVs And Hybrids, Cuts Some Auto Taxes - Reuters
- M23 Rebels Appear To Seize Most Of Goma In Eastern DR Congo – France 24
- France's Budget Talks Crumble, Raising Doubts About Government's Survival - Reuters
- Dominican Republic Ramping Up Deportation Of Haitian Migrants - VOA
- EU Says Drive To Simplify Will Not Weaken Climate Agenda - Reuters
Policy and Politics
Budget Blueprint Takes Shape As House Chairs Detail Fiscal Targets
Republicans on Wednesday gave shape to their ambitious party-line domestic policy plans, with several House chairs outlining the fiscal parameters they plan to meet as lawmakers begin writing a budgetary blueprint for the effort. In addition to deep spending cuts across committee jurisdictions, Republicans are targeting $125 billion in additional defense spending in the package. Other committee chairs laid out rough savings targets to be embedded in the budget resolution Republicans expect to start writing next week. Adopting that blueprint is necessary to unlock the party-line reconciliation process.
The Education and Workforce Committee, for instance, is targeting roughly $60 billion in savings, while the Agriculture Committee is eyeing about $50 billion and the Energy and Commerce Committee is targeting another $200 billion. Those numbers reflect Johnson’s desire to “set [a budget resolution] number that’s really a floor in what we hope to achieve by savings, and not the ceiling,” as he told reporters earlier Wednesday. Johnson added that “there's a lot of strategic reasons” to not targeting more ambitious cuts in the budget resolution as he tries to quickly advance the massive bill, while navigating between President Donald Trump’s costly list of policy wishlist and conservative hard-liners’ demands for spending austerity.
Interim New York DEC Commissioner Says Hochul's Punt On 'Cap And Invest' Isn't A Delay
Sean Mahar, interim commissioner of the New York state Department of Environmental Conservation, was adamant Tuesday that Gov. Kathy Hochul’s decision to not include a full rollout of the state’s Cap and Invest program in her executive budget as was expected is not a delay. The comments came following a joint budget hearing on environmental conservation and energy. The program would cap the state’s greenhouse emissions while charging for use allowances and using the money to fund climate initiatives and rebates to reduce utility costs. In her executive budget, Hochul only mentioned developing regulations for reporting greenhouse gas emissions by the end of the year.
In addition to bipartisan concern over access to charging infrastructure and power grid capacity, calls from Republicans ranged from ending New York’s zero-emission school bus mandate and making it optional for districts to replacing it with a pilot program that would explore different terrain. Maher and New York State Energy Research and Development Authority (NYSERDA) President Doreen Harris assured lawmakers that the state is developing programming to help schools ensure they are ready for the transition, which requires them to purchase exclusively zero-emission buses by 2027, with all buses in compliance by 2035.
Read More at NY State of Politics
Senate Armed Services Chair Supports $200B Defense Increase, Acquisition Reform– Breaking Defense
The new chairman of the Senate Armed Services Committee has two goals as he takes the gavel in 2025: boost defense funding by about $200 billion in the Republican’s reconciliation package and pass a sweeping acquisition reform proposal in the next defense policy bill, he told Breaking Defense in an exclusive interview. If successful in getting a plus-up for defense, Sen. Roger Wicker, R-Miss., suggested the money could be used to help fund an Iron Dome-like missile shield over the United States — one of President Donald Trump’s stated defense priorities — as well as to make key investments in areas such as shipbuilding, submarines and the Air Force’s next-generation fighter.
Wicker’s office confirmed to Breaking Defense that the SASC chairman is pursuing a parallel strategy to enact his two priorities. The first goal is getting buy-in from Trump and GOP leadership on a substantial funding increase for defense in the reconciliation bill currently under negotiation. The second involves using the fiscal 2026 National Defense Authorization Act as a vehicle to pass Wicker’s acquisition reform vision, laid out in December as the Fostering Reform and Government Efficiency in Defense (FORGED) Act.
Trump’s First 100 Days
- In First White House Briefing, Youngest Press Secretary Ever Eschews Tradition – The Hill
- White House Rescinds Federal Aid Freeze - CNN
- RFK Jr. Faces Off With Senators Over Vaccines, Abortion - WSJ
- RFK Jr. Says Government-Run Health Care Is Failing Americans - Politico
- Newly Confirmed U.S. Transportation Chief Duffy Moves To Repeal Biden Vehicle Fuel Economy Standards – Automotive News
- Trump’s Pledge To Lower Prices Is Already Facing A Reality Test - Politico
- Ted Cruz Leads Republican Charge to Defund Consumer-Protection Agency - WSJ
- Federal Government Workers React To Trump's RTO Mandate - Newsweek
- Trump Demands For Legislative Agenda Squeeze House GOP – The Hill
- Trump Sows Fear Among Migrants With Shock-and-Awe Deportation Campaign - WSJ
- With Panama Canal-U.S. Tensions Rising, ‘All Options On The Table,’ Warns Trump’s Top Maritime Official - CNBC
- Pentagon Revokes Security Detail Of Trump Critic Mark Milley, Orders Probe Into His Conduct - Forbes
Health and Wellness
Mental Health Expert Shares Suggestions To Improve Workplace Wellbeing In 2025
Mental health is no longer an out-of-office issue and employees are more inclined to seek support from their workplace, with firms that prioritise employee wellbeing experiencing better levels of staff retention and performance. Beginning the new year by improving workplace wellbeing has a whole host of benefits and Nathan Shearman – director of therapy and training at mental health training provider Red Umbrella – provides his top tips on how to achieve this.
Among his recommendations are to: Get your employees’ opinions, check in regularly with staff, provide positive feedback, Remind your employees that it’s okay not to be okay – it’s just not okay to keep feeling that way.
Industry News
U.S. Labor Union Membership Slips In 2024 To Record Low
Some 9.9% of American workers were represented by unions, down from 10% in 2023, according to the U.S. Bureau of Labor Statistics, in an annual release. Just over 14 million U.S. workers were members of unions in a total work force of 145 million, the report noted in a release that also said that the union membership rate for government workers was five times higher than for private sector workers. Overall union membership levels have sunk well below the peak of 20.1% in 1983, the first year for which data was available.
- New York and Hawaii had the highest levels of union membership while North Carolina, South Dakota and South Carolina had the lowest.
- Government workers remain strongly represented in the ranks of organized labor, with the percentage of employees who are organized standing at 32.2%, versus 2023's 32.5%.
- The percentage of federal employees in unions rose to 25.37% in 2024 from 25.1% in 2023.
- Workers in unions are paid better than others, with non-union workers having median weekly earnings that were 85% of organized workers.
- The strongest levels of union membership were found in education and protective service-related work.
- Men and black workers were more likely to be organized relative to women and other racial groups.
Elon Musk’s ‘X Money’ Partners With Visa For Payments—Here’s What To Know About Venmo Rival
Payments giant Visa will be X Money’s “first partner” for the service debuting later this year, according to X CEO Linda Yaccarino, who added X Money will connect to Visa debit cards and offer an “instant” bank account transfer option. In a follow-up post on the platform, Visa said it will enable American users of the forthcoming service to “fund and transfer money in real-time with their debit card.” Yaccarino said the Visa partnership is the “first of many big announcements about X Money this year” for the company’s payments service joining a space already dominated by three names: Venmo, Block’s Cash App and Zelle, which is jointly owned by seven U.S. banks including Bank of America and JPMorgan Chase.
Yaccarino did not share insight on what will differentiate X Money from established peer-to-peer payments competitors other than the service being native to a non-financial app, though CNBC reported X Money will allow creators on the site to get paid for their monetized content and store those funds directly on X rather than via a bank, an anonymous source told the publication. And the Visa deal is “another milestone for the Everything App,” remarked Yaccarino, nodding to the richest man in the world Musk’s ambitions to transform X into an all-encompassing service since buying the company then known as Twitter in 2022.
Manufacturers And Sellers Of Heavy-Duty Trucks Are Stuck In A Regulatory Traffic Jam
Heavy-duty truck manufacturers and dealers are caught in a swirl of shifting and conflicting rules over zero-emissions big rigs as the changing regulatory landscape undercuts the commercial prospects of the vehicles. Trucking industry executives say the road to electric trucks has become particularly cloudy in California, which has led the nation in moves away from conventional fuels and served as a model for other states looking at tightening truck rules. California has rolled back some of its rules because of the new administration in Washington even as some of the state’s zero-emissions demands remain in place.
The changes have left truck manufacturers and dealers in a limbo as they contend with a requirement to sell zero-emissions electric trucks to fleets that have little regulatory incentive to buy the new rigs. Those initiatives suffered a setback this month when the California Air Resources Board, citing anticipated opposition from the Trump administration, abandoned a request to the Environmental Protection Agency for a waiver that would have allowed California to force trucking companies to buy battery-electric vehicles. The mandate was part of the state’s multipronged effort to create a commercial market for zero-emissions trucks, a strategy that has effectively collapsed with the withdrawal of one leg of the regulatory plan.
Germany Slashes Growth Outlook In ‘Serious’ Diagnosis Of Europe’s Largest Economy
The German government on Wednesday slashed its gross domestic product forecast to just 0.3% growth in 2025. “The diagnosis is serious,” Robert Habeck, economy and climate minister, said during a press conference. He noted that, while there are some positive developments such as rising demand for credit, “Germany is stuck in stagnation.” Meanwhile the association of German Industry on Tuesday forecast the country’s economy will contract by 0.1% in 2025, in what would be the third annual decline in a row.
The latest GDP estimate is sharply down from an October projection of 1.1% growth this year, but broadly in line with forecasts from other economic bodies. The International Monetary Fund earlier this month cut its outlook and now sees 0.3% growth for the German economy this year, while the federal Bundesbank in December said it was anticipating the GDP to increase by 0.2% over the period., Habeck on Wednesday said that Germany suffers from structural problems. In a statement on Wednesday he pointed to a shortage of laborers and skilled workers, exuberant bureaucracy and weak investment.
ASML Earnings Beat Estimates
Semiconductor equipment company ASML posted better than expected fourth quarter earnings and its CEO dismissed concerns that DeepSeek's latest breakthrough would hurt demand for AI chips. ASML invented the technology required to make the world’s most advanced artificial intelligence chips and is the only manufacturer of the complex machines that use its EUV lithography technology. The latest version of those EUV machines costs nearly $400 million. ASML sells its machines to chip manufacturers such as TSMC, which uses those machines to produce chips for Nvidia, Apple, and other tech heavyweights.
The Dutch firm on Wednesday reported earnings per share of €6.85, ahead of the €6.68 expected, and its quarterly revenue of €9.2 billion topped the €9 billion forecast, according to Bloomberg consensus estimates. ASML’s 2025 first quarter sales forecast also surpassed expectations, with its guidance range of €7.5 billion to €8.0 billion ahead of the €7.2 billion consensus estimate, per Bloomberg.
General Dynamics Beats Results Estimates On Steady Defense Demand
General Dynamics beat expectations for fourth-quarter results on Wednesday, as strength in the company's defense businesses offset persistent supply issues holding back jet deliveries. The Russia-Ukraine war and the escalation of conflicts in the Middle East fueled demand for weapons and military vehicles during the quarter. The company's three defense segments - combat systems, marine and technologies - posted revenue increases of 1.3%, 16.2% and 2.8%, respectively.
Revenue in the aerospace unit, which makes Gulfstream business jets, jumped 36.4%, even though supply of jet engines has been held up by longer certification times, keeping General Dynamics from completing deliveries on schedule. The company delivered 136 aircraft during the year, lower than its revised October estimate of 150 aircraft. The Virginia-based company reported a 14% rise in quarterly profit to $4.15 per share, compared with analysts' estimates of $4.05 cents per share, according to data compiled by LSEG.
Other Company Earnings of Note
IBM surpassed fourth-quarter profit estimates on Wednesday, driven by robust demand in its software unit as businesses ramped up IT spending, sending the company's shares soaring about 10% in extended trading. Total revenue was relatively flat at $17.55 billion for the quarter and largely in line with analysts' estimates, according to data compiled by LSEG. IBM's fourth-quarter adjusted per-share earnings of $3.92 compared with estimates of $3.75. IBM also forecast revenue growth of at least 5% at constant currency for fiscal 2025, higher than the 3% increase seen in 2024. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $5 billion inception-to-date, up about $2 billion from the third quarter. Read more at Yahoo Finance
Microsoft reported its second quarter earnings after the bell on Wednesday, beating estimates on the top and bottom lines but falling short on estimates for its Intelligent Cloud business. For the quarter, Microsoft reported earnings per share (EPS) of $3.23 on revenue of $69.6 billion. Analysts were anticipating EPS of $3.13 on revenue of $68.8 billion, according to Bloomberg consensus data. The company reported EPS of $2.93 on revenue of $62 billion in the same quarter last year. Microsoft’s Commercial Cloud segment revenue, which includes cloud services sales, saw revenue of $40 billion, a 21% year-over-year increase but shy of Wall Street expectations of $41.1 billion. Microsoft's intelligent cloud business, which includes its Azure platform, saw revenue of $25.5 billion. Wall Street was expecting $25.8 billion. Read more at Yahoo Finance
Meta reported fourth-quarter earnings that beat on the top and bottom lines. Earnings per share were $8.02 vs. $6.77 expected and revenue was $48.39 billion vs. $47.04 billion expected. Sales in the fourth quarter jumped 21% year over year while net income grew 49% to $20.8 billion, up from $14 billion a year earlier. Meta said it expects first-quarter revenue to be in the range between $39.5 billion and $41.8 billion. The midpoint of that figure trailed analysts’ expectations of first-quarter revenue of $41.73 billion. The company’s Meta AI chatbot surpassed 700 million monthly active users. Zuckerberg said he expects Meta AI to reach one billion users this year. Read more at CNBC
Tesla reported earnings and revenue for the fourth quarter that missed analysts’ estimates. Earnings per share were 73 cents adjusted vs. 76 cents expected and revenue was $25.71 billion vs. $27.26 billion expected Tesla’s revenue increased just 2% from $25.17 billion a year earlier. Automotive revenue fell 8% to $19.8 billion from $21.56 billion in the same quarter last year, and of that, $692 million came from regulatory credits. Operating income declined 23% year over year to $1.6 billion. The company cited reduced average selling prices across its Model 3, Model Y, Model S and Model X lines as a major reason for the decline. Net income dropped 71% from a year earlier to $2.32 billion, or 66 cents a share, from $7.93 billion, or $2.27 a share. Last year’s net income figure was bolstered by a $5.9 billion one-time noncash tax benefit. Read More at CNBC
Signature Flight Services Ready to Break Ground at Stewart Airport
Signature Flight Services has been attempting to build a facility at New York Stewart International Airport for some six years and now it looks like it will become a reality. Stewart spokesman Yil Surehan told the Stewart Airport Commission on Tuesday construction could begin shortly. “It will call for a 40,000 square foot hangar and a roughly 6,000 square foot FBO (fixed base operator) terminal adjacent to our building right here,” he said. “They will provide notice to proceed to their contractors no later than June 30th. They have already done preliminary survey and geo-testing work.”
Two other projects, a commercial hangar and an aircraft maintenance facility, should also be underway later this year.