Kevin Warsh, the Federal Reserve Chairman, kept the financial world in suspense during his last public engagement before the central bank's meeting in October. He was speaking in Bangkok on Friday but gave no clues about future monetary policy. "I don't prejudge meetings, " Warsh said during a conversation with the International Monetary Fund's Managing Director, Kristalina Georgieva. The markets were left to read between the lines.
Although Warsh stayed mum, recent economic indicators might suggest where the Fed could be headed. In September, U. S. producer prices jumped by 6.3% compared to the previous year, outstripping the projected 5.5%. Earlier reports in the week showed consumer inflation also beating expectations, climbing to 3.7% year-on-year against the forecast of 3.6%.
Warsh pointed to a global pattern of synchronized monetary tightening, noting there are no "free riders" in the fight against inflation. This highlights the difficulties central banks face in trying to control price stability as costs rise worldwide.
Over in the AI sector, it was a rough Thursday as investors worried about funding. CoreWeave, a key player in the "neocloud" space, was at the center of the sell-off. Yields on the company's bonds due in 2031 shot up to 15.78%, indicating a heightened risk perception among investors. The spread on its five-year notes also surged past 1,140 basis points, putting it in territory usually reserved for distressed pricing.
The broader AI and semiconductor markets felt the shock waves too. Nvidia shares slid 1.84%, AMD fell 1.5%, and Intel dropped about 2.8%. Dell Technologies took the biggest hit, plummeting 6.8%. Collectively, the top 20 global AI and semiconductor stocks have faced significant losses this week, driven by rising interest rates, funding issues, and increased competition.
In another development, Russia's Finance Minister Anton Siluanov showed up at a Group of 20 meeting in Bangkok on Thursday. It was only his second in-person attendance since Russia's 2022 invasion of Ukraine. Siluanov, along with Bank of Russia Deputy Governor Elizaveta Danilova, represented Russia at the finance ministers' and central bank governors' meetings, held alongside the IMF-World Bank Annual Meetings.
German Finance Minister Lars Klingbeil also attended, having previously refused to be in a group photo with Siluanov at the August G20 finance ministers' meeting in the U. S. After the meeting on Thursday, Klingbeil reportedly reiterated that Russia's presence at the G20 would not be normalized.
Meanwhile, in entertainment, Hybe, the company behind K-pop sensation BTS, saw its shares jump 10% on Friday. This surge was driven by investor optimism over the company's third-quarter earnings, buoyed by BTS' global concert tours. Hybe's revenue for the quarter is expected to hit 1.5 trillion won ($1.11 billion), marking a 106% increase from the previous year. Operating profit is projected to reach 172.2 billion won, with concert revenue anticipated to nearly triple to 717 billion won.
