World Street | Powell dispels rate hike fears; CEO shuffle at AWS; Ilya Sutskever exits OpenAI; Meme stock rally returns, and more

World Street offers a sneak peek into the world of business and economy.

Federal Reserve Chair Jerome Powell stated that inflation is slowing more gradually than expected, impacting policy decisions. Adam Selipsky will step down as CEO of Amazon Web Services, succeeded by Matt Garman. OpenAI co-founder Ilya Sutskever is leaving the startup. Meme stocks AMC, GameStop rally after the re-emergence of Keith Gill, also known as "Roaring Kitty. All this and more on this edition of World Street.

Disinflation Drag

US Federal Reserve Chair Jerome Powell reiterated Tuesday that inflation is falling more slowly than expected and will keep the central bank on hold for an extended period.

The rapid disinflation that happened in 2023 has slowed considerably this year and caused a rethink of where policy is headed, Powell said at the annual general meeting of the Foreign Bankers' Association in Amsterdam. He, however, repeated that he does not expect the Fed to be raising rates.

CEO Shuffle

Adam Selipsky, CEO of Amazon’s cloud computing business, will step down from his position next month. Matt Garman, senior vice president of sales and marketing at Amazon Web Services (AWS), will succeed Selipsky after he exits the company on June 3, Amazon said.

In a memo to employees, Selipsky said he was leaving AWS after about 14 years to spend more time with his family, and said “the future is bright” for the juggernaut cloud business.

Wholesale Woes

Wholesale inflation in the US picked up in April to its highest rate in a year, according to the Bureau of Labor Statistics data. The Producer Price Index, which measures the change in prices that manufacturers pay to suppliers, was 2.2 percent for the 12 months ended in April.

That gain is higher than what was seen in March, which was downwardly revised from 2.1 percent to 1.8 percent. This could prompt interest rates to stay higher for longer and could further delay the Fed’s plans for cuts on that front.

Founder's Future

OpenAI co-founder Ilya Sutskever that he’s leaving the Microsoft-backed startup. “I am excited for what comes next — a project that is very personally meaningful to me about which I will share details in due time,” Sutskever wrote in an X post on Tuesday.

His exit comes months after OpenAI went through a leadership crisis involving co-founder and CEO Sam Altman.

Policy Pushback

In the latest clash between air carriers and the Biden administration, major US airlines are suing the US Transportation Department over a new rule requiring upfront disclosure of airline fees.

Lobbying group Airlines for America, along with American Airlines, Delta Air Lines, United Airlines, JetBlue Airways, Hawaiian Airlines and Alaska Airlines filed suit against the USDOT in the U.S. Fifth Circuit Court of Appeals in Louisiana on Friday, reported Reuters.

Rally Reward

MicroStrategy Inc., a company best known for accumulating around $13 billion hoard of Bitcoin, will be included in a key global equity index following a rally in the firm’s shares that outpaced the digital asset, reported Bloomberg.

The Tysons Corner, Virginia-based enterprise software maker is one of the three largest additions to the MSCI World Index based on market capitalization (m-cap), MSCI Inc. said on Tuesday.

Yen Yields

The People’s Bank of China extended a key policy loan at the same borrowing cost, signalling an intention to aid a nascent economic recovery without adding pressure on the yuan. China’s central bank offered 125 billion yuan ($17.3 billion) via its medium-term lending facility, matching the amount of such loans maturing this month, reported Bloomberg.

Meme Magic

AMC Entertainment (AMC) is cashing in on the revival of the meme stock trade. The struggling theatre chain raised $250 million of "new equity capital" through the sale of 72.5 million shares on Monday, according to an SEC filing.

The completion of the equity offering, which was initially launched on March 28, came as the meme trade roared back into action. After the re-emergence of Keith Gill, also known as "Roaring Kitty," whose bull case on GameStop ignited the meme stock rally in 2021, sent shares of GameStop (GME) soaring on Monday, AMC quickly followed suit.