Good morning. Here's what happened overnight and what you need to know today.
1.
Dovish Fed: Federal Reserve vice chair for supervision Michelle Bowman said Saturday (Sunday AEST) that this month’s weaker-than-expected US job market report strengthens her belief that three interest rate cuts will likely be appropriate this year. Most Fed officials had been cautious about cuts due to tariff-related inflation risks, but several are now signalling openness to easing as labour market concerns grow. Bowman was one of two Fed governors who dissented in July against leaving short-term borrowing costs in the 4.25%-4.50% range, citing concerns about labour market fragility. She pointed to the unemployment rate rising to 4.2% and revisions showing job gains over the past three months averaging 35,000. Ahead of inflation numbers due Tuesday, Bowman said: “As I gain even greater confidence that tariffs will not present a persistent shock to inflation, I see that upside risks to price stability have diminished.” The Fed has three policy meetings remaining in 2025. (Fed)(Reuters)(AP)
2.
Br(AI)n Trust: A 23-year-old former OpenAI researcher with no professional investing experience has quickly raised more than USD1.5 billion ($2.3 billion) for an AI-focused hedge fund he describes as a “brain trust on AI” and gained 47% in the first half of 2025. The Wall Street Journal reports Leopold Aschenbrenner, a native of Germany who briefly worked as a researcher at OpenAI before being pushed out, later founded Situational Awareness. He took the firm’s name from his 165-page essay on the promise and risks of artificial superintelligence. The San Francisco-based fund invests in global stocks expected to benefit from AI development and a small number of startups. Investors include Stripe founders Patrick and John Collison, Daniel Gross and Nat Friedman, who were recently recruited by Mark Zuckerberg to help run Meta’s AI efforts. Billions are also pouring into other new AI hedge funds, with many sharing top holdings, including AI startups such as Anthropic, power companies supplying data centres such as Vistra, and companies in the semiconductor and infrastructure sectors. It comes as fund managers join the war for AI talent. (WSJ)(Capital Brief)
