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ZEITGEIST

April 30, 2026

Jerome Powell broke with 75 years of precedent Wednesday, announcing he would remain on the Fed's board as a governor after handing the chairmanship to Kevin Warsh next month. Every Fed chair since the Truman era has left the building when a successor arrived. Powell said the administration's legal attacks — including a criminal probe into his oversight of building renovations that prosecutors halted last week — left him "no choice." He intends to keep "a low profile," he said, but by staying he denies the administration the board vacancy it had been counting on. Trump mocked the decision on social media: Powell wants to stay "because he can't get a job anywhere else."

The rate decision itself was uneventful — held steady at 3.5% to 3.75% — but the dissents were not. Four officials broke with the majority, the most at any meeting since 1992. Three regional presidents — Cleveland's Beth Hammack, Minneapolis's Neel Kashkari and Dallas's Lorie Logan — objected to retaining the committee's "easing bias," which has signaled for two years that the next move in rates is more likely down than up. They were serving notice less to Powell on his way out than to Warsh on his way in: with energy prices rising, core inflation stuck near 3% and tariffs still working through the system, this is a committee unable to deliver the cuts the White House wants. A fourth dissenter, governor Stephen Miran, went the other direction, favoring a cut — and is now set to leave the board because Powell's decision to stay eliminates the vacancy. Warsh's nomination advanced through the Banking Committee on a party-line vote Wednesday, the first ever for a Fed chair. His first meeting as chair is June 16-17. "His first meeting is not going to be one in which he goes in there and dictates policy," said JPMorgan Chase chief U.S. economist Michael Feroli.

Big Tech delivered results that largely justified the enormous capital bets — but also made clear how steep the bill is getting. Alphabet posted the strongest quarter of the bunch, with net income up 81% and its Google Cloud unit generating $20 billion in first-quarter revenue, a 63% year-over-year increase. Its cloud backlog ballooned to $460 billion, up from $240 billion in the prior quarter, and CEO Sundar Pichai said AI is "lighting up every part of the business." Alphabet also announced it would begin selling its custom Tensor Processing Unit chips directly to some external customers for the first time. It raised its 2026 capex estimate to $180 billion to $190 billion. Shares rose more than 6% in after-hours trading.

The other three were more mixed. Amazon's AWS segment saw income surge 28%, but the company spent $59.3 billion more on property and equipment than in the year-earlier quarter, leaving it with just $1.2 billion in annual free cash flow. Meta beat expectations on both sales and income but shares fell about 7% after hours after the company raised its 2026 capex guidance to $125 billion to $145 billion, citing "higher component pricing." Microsoft beat on sales, earnings and margins, but its Intelligent Cloud unit reported operating income below expectations, and shares were roughly flat. The four companies combined for $410 billion in capex last year and are expected to exceed $670 billion this year. "We're seeing constraints across the board," said Jefferies tech analyst Brent Thill. "It's good for the picks and shovels, but it's not good for the people who are assembling all the pieces."

Separately, the White House opposes Anthropic's plan to expand access to Mythos, its powerful AI model capable of finding and exploiting software vulnerabilities. Anthropic proposed letting roughly 70 additional companies use the model, which would have brought total access to about 120 entities. Administration officials pushed back on security grounds and over concerns about computing capacity. The company is also investigating potentially unauthorized access to Mythos, adding to fears about an avalanche of software bugs.

The UAE's departure from OPEC is more than an oil-market story — it's the opening bell for a new Middle East order. Israel recently sent its Iron Dome missile-defense system and dozens of troops to operate it to the Gulf state, something unthinkable elsewhere in the Arab world. The two countries' deepening military cooperation, born of the Abraham Accords and accelerated by the Iran war, is redrawing political fault lines that defined the region for decades. Iran fired around 2,800 drones and missiles at the UAE — more than at any other target including Israel — and its leaders concluded that their Arab neighbors didn't show up when it mattered. Anwar Gargash, a diplomatic adviser to the Emirates' ruler, said the Gulf Cooperation Council's position "is the weakest in history." The UAE is now rethinking its ties to other regional organizations including the Arab League and the Organization of Islamic Cooperation, though officials said no further withdrawals are planned for now.

That rupture is widening an already-deep rift with Saudi Arabia. The two Gulf powers are fighting for influence over the Red Sea on opposite sides of conflicts in Sudan and Yemen, competing economically as Saudi Crown Prince Mohammed bin Salman tries to challenge Dubai as a regional hub, and maintaining fundamentally different postures toward Iran. Saudi Arabia has condemned Iranian attacks but stopped short of severing economic ties, and didn't publicly support a UN Security Council resolution backed by the UAE authorizing force to reopen the Strait of Hormuz. "You're getting a stress test for this relationship that may show some further divisions," said Robert Jordan, a former U.S. ambassador to Saudi Arabia.

With the strait still largely shut, the administration is pitching a new international coalition called the "Maritime Freedom Construct" to get ships moving again — a tacit acknowledgment that Trump's earlier declaration that the strait was "COMPLETELY OPEN AND READY FOR BUSINESS" didn't hold. An internal State Department cable sent Tuesday instructs U.S. diplomats to press foreign governments into joining an effort that would share information, coordinate diplomatically and enforce sanctions. Trump, sitting in the Oval Office Wednesday, was undeterred: "the blockade is genius, OK, the blockade has been 100% foolproof."

Defense Secretary Pete Hegseth testified publicly for the first time since the war began, sparring with Democrats for hours. At the hearing, acting Pentagon comptroller Jay Hurst gave the first cost estimate for the war: $25 billion so far, including munitions, ship and aircraft operations and destroyed equipment. That figure is in addition to the Pentagon's $1.5 trillion budget request for 2027. Hegseth called congressional Democrats "the biggest adversary we face at this point." When pressed by Rep. Seth Moulton on his earlier statement that U.S. forces would give "no quarter, no mercy" to enemies — language that Moulton said describes a war crime under the Geneva Conventions — Hegseth did not directly recant, saying the Department of War "fights to win."

The Supreme Court further eroded the Voting Rights Act. In a 6-3 decision along ideological lines, the court sharply restricted states from using race to draw voting districts that help minority communities elect their preferred candidates. Justice Alito, writing for the majority, said the Voting Rights Act's central provision applies only to redistricting that "intentionally" discriminates, not to partisan gerrymandering that happens to reduce minority voting power. Justice Kagan, in dissent, called it the conservative majority's "now-completed demolition of the Voting Rights Act." The ruling threatens Louisiana's congressional map, which has two majority-Black districts, and could eliminate at least one Democratic seat, though it wasn't immediately clear what the state could do before its May 16 primaries. Hours later, Florida's Republican-led legislature approved a new map that could add as many as four more Republican seats there. A Harvard law professor said the decision could produce the largest drop in minority representation in Congress since the 1880s, when Black voters were broadly disenfranchised after Reconstruction.

In professional golf, the Saudi experiment is over. Saudi Arabia's Public Investment Fund will no longer bankroll LIV Golf after this season, with LIV planning to notify players and staff by Thursday. The Saudis lost billions on the venture, and PIF's recent five-year strategy made no mention of the league. Now comes the reckoning for players who left the PGA Tour: Brooks Koepka rejoined through a one-time program that could cost him up to $90 million, but that path is unlikely to be available to others. "There were rules, and they were broken," said PGA Tour CEO Brian Rolapp. "With rules comes accountability." Bryson DeChambeau, a two-time major winner who joined LIV's antitrust suit against the Tour and stayed even when the return window was open, faces a particularly difficult road back.

In Oakland, Elon Musk returned to the stand for a second day in his trial against OpenAI, calling himself "a fool who provided them free funding" to create what became an $800 billion company. During cross-examination, OpenAI attorney William Savitt flashed a Musk tweet from March claiming Tesla "will be one of the companies to make AGI" — relevant because Musk once proposed folding OpenAI into Tesla. Asked about his promised $1 billion donation, of which he gave $38 million, Musk said: "I contributed my reputation. These things all have value."

And Bill Ackman's new stock-picking fund had a rough trading debut, with shares in Pershing Square USA dropping 18% on the New York Stock Exchange. Most of the $5 billion raised came from institutional investors rather than the everyday investors Ackman had courted through his social-media following. PSUS priced at $50, opened at about $42 and closed at $40.90. Ackman, who rang the opening bell with his wife Neri Oxman, left before the shares started trading.

A Fed chair refusing to leave, a Supreme Court further narrowing the Voting Rights Act, and the biggest tech companies pouring hundreds of billions into AI infrastructure — Wednesday's picture is of institutions being stress-tested from every direction, with the people running them making bets that won't be judged for years.

ZEITGEIST DISPATCH — April 30, 2026

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