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Powell Dismisses Partisan Survey As Fed Leaves Rates Unchanged
PLUS: Apple Has Officially Botched AI
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TheBRRR’s Thoughts
GM.
On balance, the Federal Reserve and Jerome Powell’s FOMC press conference moved markets higher, as traders breathed a sigh of relief after weeks of meltdown.
The Fed left interest rates unchanged and slowed down quantitative tightening.
At the presser, Powell waved off the latest UMich inflation survey as borderline satire—Dems are bracing for a Venezuelan-style 6.5% price spike, while Republicans anticipate a utopian 0.1% blip.
Powell later revealed that the committee’s base case for their economic projections includes retaliatory moves from all of the countries Trump is escalating his trade war with, setting up any wins Trump garners as upside surprises for the market.
Markets have bounced around since yesterday’s presser, but are marginally higher at today’s close.
Fed Leaves Rates Unchanged, Markets Bounce

Synopsis:
The Fed maintained rates at 4.25%-4.50%, signaling a dovish tilt with the dot-plot suggesting two rate cuts by year-end. Powell downplayed rising inflation expectations as temporary and dismissed politically skewed University of Michigan survey data. Markets reacted positively, interpreting Powell's cautious stance as a subtle support mechanism ('Powell put').
The Details:
Rates: Unchanged at 4.25%-4.50%, projecting two cuts by year-end.
GDP Forecasts: Downgraded to 1.7% (2025) and 1.8% (2026).
Inflation Forecasts: Core PCE revised upward to 2.8% for 2025, maintaining 2.2% in 2026.
QT Taper: Reduced Treasury runoff from $25bn/month to $5bn/month; Gov. Waller dissented.
Market Reaction: S&P saw best FOMC day since 2022, VIX dropped below 20, suggesting lowered volatility concerns.
Trading Volume: Low volume (13.5bn shares) indicated cautious market optimism despite liquidity concerns.
WHY IT MATTERS:
Market Implications: Fed’s dovish signaling amid slowing growth and tariff-driven inflation risks bolstered short-term equity confidence, though skepticism on sustained economic stability remains high.
Macro Risks: Potential "stagflationary" conditions driven by tariffs and policy uncertainty remain a significant concern for long-term market stability.
Trading Opportunities: Traders capitalized on the immediate relief rally; however, liquidity challenges and the stark divergence between market optimism and macroeconomic data offer contrarian opportunities.
Bullet Points:
Powell’s dismissal of UMich inflation data seen as political bias mitigation.
S&P index rally (+367 names positive), driven by retail and high-beta tech.
Fed acknowledging "increased uncertainty" yet downplaying recession fears.
CTAs significantly short on US equities (-$34bn) vs. long European equities (+$52bn), marking unprecedented divergence.
Apple Failed To Deliver Promised AI Features, Revamps Org
Synopsis: Apple is reshuffling its AI leadership after major setbacks, appointing Mike Rockwell—the executive behind the Vision Pro headset—as head of Siri, while AI chief John Giannandrea retains broader oversight. CEO Tim Cook, frustrated by delays and Apple's lagging position in AI, is betting Rockwell can deliver where others have stumbled.
The Details:
Siri's promised AI-powered upgrades (highlighted heavily for iPhone 16) are delayed until late 2025, causing market confidence to waver and Apple's stock to drop nearly 5%.
Internal morale is strained; Siri’s former project lead publicly described the delays as "ugly" and "embarrassing."
Apple's incremental AI improvements have not matched dramatic advances by competitors like Microsoft (integrated OpenAI tech), Google (Bard, Gemini), and OpenAI’s ChatGPT, leaving Siri notably behind.
WHY IT MATTERS:
Apple’s lagging AI efforts threaten its competitiveness and could dampen future iPhone upgrade cycles.
Investors have grown restless as Apple's cautious, privacy-centric AI approach contrasts sharply with competitors' rapid, cloud-driven deployments.
Rockwell's new role signals Apple’s urgent pivot toward more impactful, consumer-ready AI solutions. Success or failure here could significantly reshape Apple’s reputation as an innovator.
Quick Takes:
Investors on Edge: Wall Street analysts warn continued AI delays could undermine Apple's market valuation.
Playing Catch-Up: Apple’s AI approach—emphasizing privacy and on-device integration—faces a critical test against Google's and Microsoft's advanced cloud-based AI.
Internal Pressure Mounts: Executives have sent "fixers" to the Siri team, highlighting intense internal dissatisfaction and the scale of Apple’s AI challenge.
Consumer Impact: Users eagerly await promised Siri improvements; delays could push them toward third-party AI solutions like ChatGPT apps.
Industry Views: Analysts remain cautiously optimistic, highlighting Apple’s strengths in hardware and privacy but stressing urgency in delivering tangible AI advancements soon.
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Older Notes
Wednesday, April 3, 2024: We haven’t deployed the cash yet, but are eyeing exposure to a few assets including META and PLTR.
Monday, March 11, 2024: We sold Apple this morning. The newsletter held the stock from inception a year ago for a meager 12% gain.
The company has lost its magic evident by complacent iPhone releases, lack of a coherent vision for AI integration and punitive & anti-competitive App Store policies.
We believe the stock will move in-line with the broader Nasdaq going forward.
We’ll sit on the cash for now, but plan to redeploy it quickly.
Watchlist
$META: Sleeper in AI race and ad biz is proving resilient
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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.
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