FinSoar — Fed in the Fog ☁︎

Hi there, 

Welcome to FinSoar, the sea of information for smooth sailing across the world of finance! 

Thanks for sticking around and becoming a part of my passion project to connect with like-minded individuals who want to learn about the economy, investments, and the markets every Tuesday and Friday. 

Here’s what I have for you today: 

Trump just made hiring foreign tech workers 4,000% more expensive. The new $100,000 annual H-1B visa fee transforms what was an administrative cost ranging between $1,700 to $4,500 into a serious business decision.

Tech giants like Amazon and Microsoft could face over $1 billion in new annual fees. Indian IT outsourcing firms, which rely heavily on H-1B workers, are calling it an existential threat to their business models.

Trump wants "blockbuster economic growth" in AI and manufacturing, but his immigration crackdown is shrinking the very workforce needed to achieve it. The Congressional Budget Office now projects net immigration of just 400,000 this year, down from 2 million in January.

American tech workers may finally see wage increases (a 2020 study found most H-1B workers are underpaid), but smaller companies could be priced out of global talent entirely. The policy effectively forces a choice: pay premium prices for foreign talent or invest heavily in training Americans.

The move has already strained U.S.-India relations, with Bloomberg reporting it as a "body blow" to the strategic partnership. Indians make up over 70% of H-1B recipients.

Commerce Secretary Howard Lutnick's message was clear: "If you're going to train people, you are going to train an American." On Friday, we’re going to cover how international travel to the U.S. is suffering, and will continue to decline. 

Sources: Axios, Bloomberg, NPR

The AI economy is becoming a fascinating game of financial musical chairs. Nvidia just announced a $100 billion investment in OpenAI, while simultaneously taking a $5 billion stake in Intel and launching joint research labs in Abu Dhabi. 

Although I am still optimistic about the possibilities AI could bring us — with responsible energy use, of course — I couldn’t help but think: is this a Ponzi scheme? And I’m not the only one. 

OpenAI will use Nvidia's investment to buy... more Nvidia chips. As one analyst put it: "Nvidia invests $100 billion in OpenAI, which then OpenAI turns back and gives it back to Nvidia. I feel like this is going to be very virtuous for Jensen."

And the scale is staggering. OpenAI's planned 10-gigawatt data center buildout equals 4-5 million GPUs — roughly what Nvidia ships in an entire year. At current prices, that's $35 billion worth of Nvidia hardware per gigawatt.

Beyond OpenAI, Nvidia has dropped $700 million on UK startup Nscale, $900 million to acquire AI startup Enfabrica's team, and now $5 billion on Intel, joining the U.S. government as a major Intel shareholder.

This mirrors broader market dynamics where upper-income households, flush with stock gains (the S&P is up 16% year-over-year), drive consumer spending that reinforces corporate earnings. 

ALL recent S&P 500 earnings upgrades have come from just 7 AI-related stocks, with both Nasdaq and Dow joining the S&P 500 in an immense boost on Monday. 

When everyone's investing in the same ecosystem, what happens when the music stops? The advance-decline line shows only 7 stocks driving market gains — a classic warning sign of a bubble.

Sources: CNBC, Reuters, The Bondad Blog

You can’t write a finance newsletter and ignore the consumer: American families are bracing for a brutal winter of higher costs across three essential categories: heating bills, groceries, and health insurance.

Home heating costs are expected to jump 7.6% this winter to an average of $976, according to the National Energy Assistance Directors Association.

Electric heat users face the steepest pain — bills up 10.2% to $1,205, with Southern households seeing spikes over 21%.

Food prices posted their biggest monthly jump since August 2022, with coffee up 20.9% year-over-year and beef steaks climbing 16.6%. Half of Americans now cite grocery costs as a major source of stress, outpacing concerns about rent or healthcare.

So much for bullying Millennials and Gen Z about avocado toast, coffee, and matcha. 

Trump's tariffs are hitting imported food staples like bananas and coffee, while electricity demand from AI data centers drives up utility costs. Federal assistance for heating bills remains flat at $4 billion despite rising need.

Medical care inflation hit a three-year high of 4.2% in August, with employers projecting health benefit cost increases of 9.5% next year — potentially adding $17,000+ per employee. That's the highest in 15 years.

Social Security recipients are tracking for a 2.8% cost-of-living adjustment next year, slightly higher than 2025's 2.5% increase. 

But with senior poverty rates rising to 15%, it may not be enough to offset the broader cost pressures.

Sources: Axios, CNN, NPR, National Energy Assistance Directors Association

The Federal Reserve cut interest rates for the first time in nine months last week, but Chair Jerome Powell's unusually blunt admission captured the economic moment: "It's not incredibly obvious what to do."

The Fed delivered a quarter-point cut to 4%-4.25%, but newly appointed Governor Stephen Miran dissented, pushing for a half-point reduction. 

His reasoning? "I don't see any material inflation from tariffs"— a view that puts him at odds with most economists tracking rising prices from Trump's trade policies.

Black unemployment has spiked to 7.5%, up sharply from the start of the year and historically a leading indicator of broader economic weakness. 

When the labor market weakens, research shows Black workers face disproportionate job losses, making this a critical early warning system.

Despite the economic uncertainty, stocks hit record highs after the rate cut, with 81% of S&P 500 companies beating earnings expectations. 

But a record 58% of fund managers now say global stock markets are "overvalued" — suggesting investors know they're in dangerous territory but can't resist the ride.

Here’s the Fed’s dilemma: Powell described the current situation as "low hiring and low firing," but warned that if layoffs begin, "there won't be a lot of hiring going on." 

The central bank is essentially taking out insurance against a potential downturn while hoping it won't need the coverage.

When the Fed chair admits he doesn't know what to do next, it might be time to prepare for turbulence ahead.

Sources: CNN, Wall Street Journal, Federal Reserve, Axios

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That’s all for today!