Fed holds rates steady as Big Tech AI spending faces scrutiny

The Federal Reserve is expected to hold interest rates steady at its Wednesday meeting, with markets pricing in a 90% chance of no move, keeping the fed funds rate at 3.75%-4% after last month's hike. Microsoft, Alphabet, and Amazon report earnings this week, putting AI spending under scrutiny as investors question whether massive infrastructure investments will generate sufficient returns. JetBlue creditors are organizing amid cash burn and rising fuel costs. Fed Chair Kevin Warsh will speak afterward, with analysts expecting little forward guidance, though some see a hawkish lean due to hot inflation. One analyst suggests a rate cut is possible, citing a bursting AI bubble.