WSJ What’s News - Markets Dive After the Fed Holds Steady

Episode Date: July 29, 2026

P.M. Edition for July 29. Fed officials voted to keep current interest rates in place. WSJ economics reporter Matt Grossman joins to discuss the internal pressure that’s building at the central bank to curb inflation. Plus, Dr. Anthony Fauci invoked the Fifth Amendment more than 100 times during a contentious Senate committee hearing about his handling of the Covid-19 pandemic. And WSJ’s Benjamin Katz explains how a potential Boeing rival could be taking flight with a plane that looks radically different from the passenger jets we’re used to. Danny Lewis hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Federal Reserve officials voted to keep interest rates steady as pressure builds to take stronger action to curb inflation. Plus, Dr. Anthony Fauci took the fifth more than 100 times during a three-hour Senate hearing on the COVID-19 pandemic. And could the most radical plane design since the Concord be the future of commercial air travel? We've used the same tube and wing design for over 70 years. Does a plane like this even fit into the end? infrastructure that we have at airports, you know, around the world. It's Wednesday, July 29th. I'm Danny Lewis for the Wall Street Journal, filling in for Alex Oscella.

This is the PM edition of What's News, the top headlines and business stories that move the world today. We start today's show with a consequential meeting of the Federal Reserve. The Fed has held interest rates steady, at least for now. Three Fed officials voted for a rate increase during today's meeting, underscoring how pressure is building within the central bank to act on inflation that has run above its target for five years. Here now to explain what happened is WSJ economics reporter Matt Grossman. Matt, three Fed presidents, Beth Hammack of Cleveland, Neil Kashkari of Minneapolis, and Lori

Logan of Dallas voted for a quarter point rate hike. Why did they vote that direction and what's the significance? Inflation has been a growing problem over the past few months. So those three presidents are some of the officials on the Fed's committee who have been especially focused on getting that number down again, saying it's really time for us to act and show that we're on the ball. Kevin Warsh was sworn in as Fed chairman in May. He's been talking a tough game on inflation, but also has said he doesn't want to reveal too much about the Fed's thinking. Anything markets are grabbing onto in his remarks today or how he delivered them? Yeah, that was the tension in Warsh's press conference today. He's been adamant that the Fed needs to get inflation back under control,

but he was not one of the officials who supported a rate hike. Warsh pointed to the fact that interest rates have been rising on their own, not the rate that the Fed sets, but longer-term rates that are set in financial markets. And Warsh was kind of hinting that as long as that process is happening, markets are kind of doing some of the Fed's work for it. Financial market prices in this intermeeting period, they didn't pause. They reacted to the inflation data in one direction,

strong economic growth in the other direction, and nominal and real rates went up. Did the Fed take an explicit change in its policy rate today? No, but I think that's the beginning of the story, not the end of the story. So, Matt, what are officials going to be looking for leading up to this next meeting in September? We're going to get a significant amount of economic data before the September meeting. We have inflation figures for July and August, and we also have the job reports for July and August. And as Warsh said in his press conference today, this is a Fed that is not offering as much guidance, partially with the intention of letting markets do their own thing and hopefully provide a signal. So if markets

are strongly hinting to the Fed that traders think rates need to rise, that could be really influential too once the September meeting comes around. That's WSJ reporter Matt Grossman. Thank you. While investors were initially cheered by Warsh's remarks, the rally faded as concerns grew about whether the Fed is doing enough on inflation. Stocks fell sharply, and the Dow sank more than 1,100 points, or more than 2%. The S&P fell 1.5% while the NASDAQ tumbled 1.7%. And the 10-year Treasury yield rose to about 4.67%, a sign of concern about rising prices. Dr. Anthony Fauci repeatedly invoked the Fifth Amendment during a Senate hearing this morning about his handling of the COVID-19 pandemic.

Fauci faced angry questions from Republican senators today after the Senate Homeland Security Committee Chairman, Rand Paul, released Fauci's pandemic-era private journals. Paul, a Kentucky Republican, subpoenaed the infectious disease doctor after Fauci declined to appear willingly. During the hearing, Fauci said he had testified before or briefed congressional congressional. committees more than 200 times, and he declined to answer this panel's questions. He said the hearing was part of a campaign of slander against him, led by Senator Paul. The only conclusion I can reach is that the sole reason he is calling me before this committee is to get me to say something, anything that could vindicate his repeated public pledges that I end up in his words, quote, behind bars, unquote.

Any reasonable person who has followed his unhinged obsession with me would readily come to the same conclusion. Fauci would go on to take the fifth before Congress more than a hundred times during the three-hour hearing, including after questions about what day of the week it was and what color was his tie. On the advice of counsel, I respectfully declined to answer based upon my rights under the Fifth Amendment of the Constitution. Paul has accused Fauci of not being forthright about school closings during the pandemic and of working to discredit the theory that the COVID virus originated in a Chinese lab. At the end of his term, former President Joe Biden issued Fauci a preemptive pardon.

Paul warned on social media yesterday that wouldn't protect Fauci if he were to lie to Congress at the hearing. It's against the law to obstruct. an investigation of Congress, there will be repercussions to your refusal to testify today. Fauci remains under scrutiny. After today's hearing, Florida's Attorney General announced an investigation into him. Coming up, it's a bird, it's a plane, it's a plane shaped like a manta ray, that and the latest big tech earnings after the break. Close your eyes and think of a commercial jet. What does it look like? If I were to guess, you're probably envisioning a tube with wings and a tail, right?

That's been the blueprint for most passenger jet liners for more than 70 years, but that might not be the case for much longer. Startup Jet Zero is making a moonshot effort to dislodge Boeing as America's only major maker of commercial aircraft, with plans for a new type of jet that are pretty out there. And it's just struck a deal with the U.S. government for up to $3 billion in fast-tracked loans to help build its first factory. Here now to explain is WSJ reporter Benjamin Katz.

Ben, what does the plane Jet Zero wants to build look like? And why is it such a radically different design from what we're used to seeing at most airports? I've been battling with this since I kind of started writing about this company. How do I actually describe what this thing looks like? My editor and I kind of ended up describing it as a manta ray. If any listener is familiar with the B2 bomber from Northrop Grumman, very similar kind of shape design.

It really comes down to what's known as the blended wing body. And it effectively is pitched as this incredibly aerodynamic design that can boost fuel efficiency by 30 to 50%. What would you experience in flying in one of these as a passenger? Like, how would it be different from flying in a conventional jet plane? I think the starkest difference is really the sense that you're in almost an auditorium where instead of the single aisle or a twin aisle, This aircraft has four.

They call it a quad aisle. You've got more people literally just sitting in the body of the plane. There are some benefits as well. So, for example, every toilet has a dedicated waiting area. So you don't have to wait in the aisle. I think that's a really big appeal. Every passenger seat, the company says, will have its own dedicated overhead cabin bin. It's basically a more spacious plane that just looks very different.

The problem really is, well, we've used the same tube and wing design for the overhaul. 70 years, does a plane like this even fit into the infrastructure that we have at airports, you know, around the world? Right. And even though the plane's design is pretty different, Jet Zero CEO Tom O'Leary recently told our what's news AM host, Luke Vargas, that a lot of its components really aren't. The factory is even more clean slate than the plane itself. A lot of what's going on the plane is going to be existing certified equipment that we

repurpose for this aircraft in a different shape. and with a different structure. Ben, how significant is that? It's hugely significant. They're pitching what is objectively a radical new aircraft design, but most of it isn't actually new at all. They're taking aircraft components from existing aircraft platforms and piecing it together.

The challenge of actually getting aircraft to market is often the safety certification aspect of it. FAA has incredibly strict rules when it comes to what is even allowed to be put on an aircraft. So what Jet Zero has done here is by taking components that are already on existing aircraft, it means that they've already been certified. It's a hugely important step. These are safety matters. So it cuts a lot of time potentially out of getting their aircraft from the design phase to actually test flying it and handing it over to airlines.

Okay, let's talk money here then. Jet Zero's deal with the U.S. Export Import Bank means it could get as much as $3 billion. How important is all this money to its goal of shaking up the aircraft manufacturing industry? When you're talking to venture capitalists, when you're talking to suppliers, we're talking to customers, really that question, is this real? Is a question of where's the money coming from? And this deal is really what is allowing or helping Jet Zero to convey to, you know, the entire ecosystem that, hey, we are real. It's really critical to point out that aircraft programs are potentially tens of billion dollar effect. $3 billion is a start.

It'll help build the factory. It'll help get them closer towards regular production if they can make it there. But it's still quite far off from the amount that they need to really launch a brand new aircraft. Early 2030s is the current guidance for when we might see this new aircraft hit the shelves, so to speak. That's WSJ reporter Benjamin Katz. Procter & Gamble gave a soft outlook for its new fiscal year, as it expects to take a $1 billion hit from higher. costs related to the Iran War. The maker of Crest Toothpaste and Pantin Shampoo is projecting sales growth

of 1 to 3 percent, and the midpoint of that range is below Wall Street's forecasts. Shares fell almost 2%. Turning to the latest big tech earnings, Microsoft reported after the market closed that its revenue grew 18 percent to $90 billion in the quarter ended in June, while profits soared 31 percent to $35.8 billion. The result beat Wall Street's expectations. And Meta reported. recorded record revenue for the quarter of $60.8 billion, but a drop in free cash flow raised concerns about the cost of the AI buildout and shares tumbled in after-hours trading. To hear more about this afternoon's earnings, check out tomorrow morning's show. And that's what's news for this Wednesday afternoon. Today's show was produced by Anthony Bansy with supervising producer

Tali Arbell. I'm Danny Lewis for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Thank you.