BREAKING: Bitcoin hit $100,000. The asset has gained more than 45% since election night. Congratulations to all the long-term holders!

On Wednesday, I attended the New York Times’ Dealbook Summit, where I saw business heavyweights like OpenAI’s Sam Altman and Google’s Sundar Pichai, among others, take the stage with host Andrew Ross Sorkin. 

Naturally as a financial reporter, the highlight for me was seeing Federal Reserve Chairman Jerome Powell. 

Today I’m sharing the biggest takeaways from the conference.

Powell: Cautious on rate cuts, optimistic on economy

Both the strength of the US economy and stickiness of inflation have given Fed Chair Jerome Powell reason to think twice about the path of interest rate cuts. 

“Growth is definitely stronger than we thought,” he told Andrew Ross Sorkin on stage at the DealBook Summit on Wednesday. “And inflation is coming in a little higher. The good news is that we can afford to be a little more cautious as we try to find neutral.”

Central bankers are set to announce their next policy decision on December 18. 

However, they face a much different economic outlook than they did during the first rate cut of the cycle two months ago.

“The economy is strong, and it’s stronger than we thought it was going to be in September,” Powell said, adding that the downside risks in the labor market have moderated. 

As of Wednesday evening, markets see a 77.5% chance that it is a quarter-point rate cut, according to CME data.

Meanwhile, Powell noted that the US has put its federal deficit on “an unsustainable path,” and something has to change sooner than later. 

The adjustment, in his view, doesn’t necessarily mean paying down the debt entirely but rather expanding the economy enough to offset it. 

Indeed, later the same afternoon Amazon’s Jeff Bezos said on stage that robust economic growth is the only way the US will survive its $36 trillion national debt.

“You’re going to solve the problem of national debt by making it a smaller percentage of GDP, not by shrinking the national debt,” Bezos said at the conference.

“That means you have to grow the GDP at three, four, five percent a year and let the national debt grow slower than that.”

Fed independence 

When asked whether the Fed could still maintain independence under a second Trump administration, Powell seemed unconcerned. 

The only thing his team is focused on, he explained, is fulfilling the central bank’s dual-mandate of maximum unemployment and price stability. 

Despite recent reports that president-elect Trump could conjure something like a shadow Fed to influence monetary policy, Powell insisted that politics do not enter the central bank’s decision-making process.

“What does independent mean? It means we can make our decisions without them being reversed,” Powell said.

“That gives us the ability to make these decisions for the benefit of all Americans, at all times, not for any particular political party or political outcome.”

Billionaire Citadel CEO Ken Griffin — a top Republican donor — spoke on stage earlier Wednesday morning, and he similarly shirked the idea of a politicized Fed. 

“The independence of the Federal Reserve is extraordinarily important to the sanctity of the dollar,” Griffin told the DealBook audience.

“Of course every president wants to push back on the Fed when they’re making tough decisions,” Griffin continued. “Part of the Fed Chairman role is to make the tough decisions that the body politic is afraid to make.”

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Elsewhere:

💰️ Powell says he isn’t allowed to own bitcoin. He also signaled that the central bank is taking it more seriously than ever: “People use it as a speculative asset. It’s just like gold, but it’s digital. It’s not a competitor for the dollar, it’s a competitor for gold.” (Benzinga)

🪙 Trump picks Paul Atkins to run SEC. The former SEC commissioner is expected to pullback regulations and enforcement, particularly on cryptocurrency companies. He’s well-known in Congress and Wall Street, and served as a Republican member of the SEC during the Bush administration. (WSJ)

🥗 Food prices keep surging. Global food commodity prices in October hit an 18-month high, a new report from the UN Food and Agriculture Organization showed. Rising prices for vegetable oils were the main driver behind the 2% jump last month. Conversely the cereals category, which contains wheat and rice, dropped 4.5%. (CNBC)

Rapid-fire:

Traders see 73% odds of a 25-basis-point rate cuts this month, according to Kalshi, the biggest US prediction market:

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