Remember when Jerome Powell could make or break your portfolio with a single raised eyebrow? Those days are officially over, and honestly, it’s kind of hilarious that nobody seems to care.
The Fed just made their first rate decision of 2026, keeping rates steady at 3.5%-3.75%. In the old days, this would’ve sent traders into a frenzy, parsing every word for hidden meaning. This time? The market basically shrugged and went back to scrolling TikTok.
So what happened to the most powerful economic force on the planet? Simple: it got replaced by something way more direct and way less subtle.
Meet Your New Economic Overlords
While the Fed was still playing chess, the White House started playing Monopoly with real money. Why wait for monetary policy to maybe work when you can just write billion-dollar checks?
Here’s how the new game works:
The Tariff Shuffle: Announce scary tariffs, then quietly cut deals with specific U.S. companies to skip them. It’s like threatening to ground all the kids, then slipping your favorites a hall pass.
Government as Venture Capitalist: Instead of lowering borrowing costs for everyone, just hand out cash directly. Intel and MP Materials are already cashing these checks.
The Golden Ticket Strategy: Just this week, USA Rare Earth got a $1.6 billion funding package. When Washington can drop that kind of money on a Tuesday, what’s a quarter-point rate cut worth?
AI Doesn’t Care About Your Interest Rates
But government intervention is only half the story. The other half is that we’re in an AI arms race, and nobody’s hitting the brakes for anything as quaint as “monetary policy.”
Big Tech companies are sitting on cash mountains and posting earnings that make rate changes look like pocket change. They were spending when rates were rising, when they peaked, when they fell, and they’re still spending now. It’s like trying to slow down a freight train with a stop sign.
Data centers are getting built, GPUs are flying off shelves, and AI stocks are following earnings, not Fed meetings. Powell could announce negative rates tomorrow and it wouldn’t change the fact that everyone needs more computing power yesterday.
Powell’s Awkward Exit
Here’s the uncomfortable truth: Jerome Powell is basically a lame duck, and everyone knows it. His term ends in May, and the new administration has made it pretty clear they want someone more “cooperative.”
The market isn’t waiting around for his farewell tour. They’re already looking ahead to whoever’s next and the rate cuts that are almost certainly coming in the second half of 2026.
The New Rules of the Game
So what’s actually driving markets in 2026? It’s not the “invisible hand” of free markets – that thing’s been buried. It’s Washington’s very visible iron fist, and right now it’s obsessed with something called the Genesis Mission.
This is the government’s massive bet on dominating global energy and AI infrastructure. We’re talking hundreds of billions in capital deployment across six core infrastructure layers. Companies like USA Rare Earth, Intel, and MP Materials are just the opening act.
The Fed? They’re still important for your mortgage rate. But for where the big money’s going in markets? That decision’s being made at 1600 Pennsylvania Avenue, not the Eccles Building.
Welcome to the new economy, where the government picks winners and AI picks up the tab. The Fed can keep their dot plots – we’ll be watching the funding announcements.