Fed Focus, Anthropic Victory and PayPal Deal Bust

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Tim Stenovec** (0:22)
This is Bloomberg Tech, I'm Tim Stenovec in for Ed Ludlow. Coming up, all eyes on Jackson Hole. After Fed Chairman Kevin Warsh delivered his first address at the symposium, we'll also hear from Bank of England Governor Andrew Bailey a little later this hour, also live from Jackson Hole. Plus, a US judge rules that the Trump administration must lift its ban on Anthropics AI tech for federal agencies.
And Advent, Stripe and others decide to abandon their pursuit of PayPal, a deal that would have ranked as one of the biggest ever leveraged buyouts. First up, though, a check on the markets. Bloomberg's Isabelle Lee is standing by for more. Hey, Isabelle.

**Isabelle Lee** (0:57)
Hi, Tim. Let's take a look at some individual stocks moving under this hour. So we're looking at a firm. The shares are jumping around 8 percent earlier. It actually jumped double digits, which is the highest since at least August 2025 So the company reported earnings that beat estimates. The company, alongside Shopify, also announced plans that it will expand some of their services in Australia. So you see a little nice boost there and also Nvidia. So the stock is kind of underperforming the Magnificent 7 But let's cut Jensen Huang some slack because on Wednesday, they did report earnings, as you know, that crushed estimates. We have Bloomberg Intelligence saying that it was jaw-dropping, JP Morgan saying it was better than expected. So it's normal for it to take a breather. And we know that yesterday Nvidia added nearly $450 billion in the company's stock. This is the second largest one-day gain just trailing after Microsoft. So let's zoom out and look at the broader equity moves. Looking at the S&P there and the NASDAQ. Kind of flat, actually. So it really didn't move just minutes earlier. We heard from Kevin Warsh saying that he vows to keep inflation under 2%.
Of course, he was in Jackson Hole. As we know, we have a special coverage on that. Kevin Warsh also said that financial restrictions currently aren't really restrictive. And he also says that the Fed's predominant tool for achieving its mandates are still interest rates. And of course, you see the bond market for some reaction. And you see here the two-year yield really reacting up by nearly seven basis points. Ten-year yield, maybe flat, I would call that. Back to you, Tim.

**Tim Stenovec** (2:19)
All right, it's about Lee with an update. Should know Max Levchin of a firm joining us on Bloomberg Business Week daily in the 2 o'clock hour. Federal Reserve Chairman Kevin Warsh warned inflation isn't meaningfully slowing. Speaking at the Fed's annual conference in Jackson Hole, Wyoming, Warsh said policymakers must be confident that it is. Otherwise, the central bank has, quote, work to do.
Let's get out to Bloomberg's Michael McKee, who's also in Jackson Hole for the latest. Hey, Mike, I think a big question going into this speech yesterday and this morning was if we find out the direction of rates for September and for the remainder of the year. Fair to say we did?

**Michael McKee** (2:58)
I think the markets are telling you that they have. It's just a question of whether you are inferring or you are taking direction.
In this case, Warsh did not promise that rates are going up and he did not suggest that rates are going up. But he did suggest that if inflation doesn't come down, then the Fed has work to do, which the markets are reading, as rates will go up. Question of when. We obviously get the CPI on September 12th. That will be a big factor in what they do on the September 16th meeting. Because if inflation is indeed rising again, that would put a lot of pressure on the Fed to start raising rates. So Warsh came in here with a cloud over his credibility and I think he leaves with the market's feeling very reassured at this point. And you can see that in the way the yield curve is flattening today.

**Tim Stenovec** (3:50)
Mike, there's a lot that we can go through with the speech that he gave last hour. We're going to be getting to the AI and technology and CapEx part of it a little later in our program on Bloomberg Tech today. One thing that stuck out to me and I wanted to get your view on was about forward guidance and slowing a policy response, because he referenced that in 2021
He thinks that forward guidance actually slowed a policy response to inflation. Can you explain how that could have occurred?