12/12/2025

BIZ & FINANCE FRIDAY | DEC 12, 2025

/thesuntelegram FOLLOW / Malaysian Paper

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Divided US Fed makes third straight rate cut

Oracle shares dive as revenue misses forecasts

SAN FRANCISCO: Shares in business computing giant Oracle fell more than 10% on Wednesday on word its revenue missed heady expectations, dampening artificial intelligence euphoria in the market. The slide in after-market trades came despite Texas-based Oracle reporting that net income in the recently-ended quarter nearly doubled to US$6.1 billion in revenue, up 14% from the same period a year earlier to US$16.05 billion. Oracle’s cloud and business computing unit accounted for US$8 billion of that revenue, an increase of 34% from the same quarter in 2024, according to the earnings report. “AI training and selling AI models are very big businesses,” Oracle chief executive Mike Sicilia said in the release. “We think there is an even larger opportunity – embedding AI in a variety of different products.” But investors are wary of the massive investments tech companies are making in artificial intelligence models and infrastructure, wondering how and when they will pay off. Oracle has taken on billions of dollars in debt to pay for AI infrastruture and is reported to be considering borrowing even more. The company has also announced it is putting significant resources into partnerships with AI chip makers and model builders, such as OpenAI and Meta. “We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers,” Oracle founder and chief technology officer Larry Ellison said in the earnings release. “There are going to be a lot of changes in AI technology over the next few years, and we must remain agile in response to those changes.” Oracle shares were down some 10.7% to US$199.50 in after-market trades that followed release of the earnings figures. – AFP

WASHINGTON: A divided US Federal Reserve lowered interest rates on Wednesday for a third consecutive time this year, but signalled that it could hold off further reductions in the coming months. Fed chairman Jerome Powell said the central bank is “well positioned to wait and see how the economy evolves from here”. The Fed’s statement on its decision also brought back language used in late-2024 to signal a pause in more rate cuts. Powell stressed that officials are in a good position to determine the “extent and timing of additional adjustments based on the incoming data, the evolving outlook and the balance of risks”. Wednesday’s reduction by a quarter percentage point brings rates to a range between 3.50% and 3.75%, the lowest in around three years, a move aligned with market expectations. The Fed penciled in one more rate cut next year, and flagged heightened risks to employment as it announced its latest decision. But a rift within the central bank deepened with three officials voting against the modest reduction. Chicago Fed president Austan Goolsbee joined Kansas City Fed president Jeffrey Schmid to support keeping rates unchanged. Fed governor Stephen Miran again backed a bigger, half-percentage-point cut. The Federal Reserve’s rate-setting committee has 12 voting members – including seven members of the board of governors, the New York Fed president and a rotation of reserve bank presidents –

o Policymakers expect only one reduction in 2026, flag heightened risks to employment

bank grapples with a delay in federal economic data releases after a record-long government shutdown. This week’s gathering is the last before 2026, a year of key changes for the bank. A new chief will arrive after Powell’s term ends in May, while political pressure mounts. On Wednesday, Trump said the Fed could have “at least doubled” its rate cut. The president also signaleld in a Politico interview published on Tuesday that he would judge Powell’s successor on whether they immediately slash rates. Interviews for his choice are entering the final stages, and Trump’s chief economic adviser Kevin Hassett is among top contenders. Miran’s term expires in January, creating an opening among the Fed’s top leadership. Trump has sought to free up another seat by attempting to fire Fed governor Lisa Cook too. Cook has challenged her ousting and the case remains before the courts. EY-Parthenon chief economist Gregory Daco noted that Hassett’s potential appointment and a “more hawkish rotation of voting members” focused more on taming inflation means a growing dispersion in views. “Policy deliberations are likely to become even more divided next year,” he said. – AFP

who take a majority vote in deciding on rates. Powell noted that some disagreement was expected, pointing to tensions between inflation risks and a weakening jobs market: “It’s a close call.” “Inflation is well above the Fed’s target, but the job market appears to be softening,” said Mortgage Bankers Association chief economist Mike Fratantoni in a statement. “Thus, there is ammunition for both sides of the debate” within the Fed, he added. For now, Powell said, the Fed is “in the high end of the range of neutral” rates, with neutral being a level that neither stimulates nor restricts economic activity. The Fed has previously described interest rates as “modestly restrictive” – “neutral” could suggest less justification to lower levels quickly. “We expect the Fed will want to pause for a while to allow time to for this and prior cuts to feed through the economy,” said economist Ryan Sweet of Oxford Economics. Powell added that the US economy needs several years where wages are higher than inflation for “people to start feeling good about affordability”. On Wednesday, Fed officials also lifted their 2026 growth forecast, while easing inflation expectations and keeping their unemployment rate projection unchanged. These forecasts could shift as the central

Trump demands CNN get new owners in Warner bidding war

WASHINGTON: President Donald Trump said on Wednesday that he wants to ensure CNN gets new ownership as part of the Warner Bros Discovery sale, targeting the news outlet he has long feuded with. Warner Bros Discovery has become the center of a bidding war between Paramount – led by CEO David Ellison, son of Trump ally Larry Ellison – and streaming giant Netflix. Under Paramount’s offer, CNN would fall into the Ellisons’ hands. Under the Netflix deal, Warner Bros Discovery would sell off CNN and other cable news properties separately before closing the sale of its studio and streaming operations to Netflix. “I think any deal should – it should be guaranteed and certain that CNN is part of it or sold separately,” Trump told business leaders on Wednesday at the White House. “I don’t think the people that are running that company right now and running CNN, which is a very dishonest group of people, I don’t think that should be allowed to continue. I think CNN should be sold along with everything else.” In a break from the norm, Trump has said he would be involved in the government’s decision to approve the deal, instead of leaving the question solely to the Department of Justice, as is typically the case. US media reports indicate that US

both bidders – which Trump called “good companies” in his remarks – have lobbied the White House and Trump directly to support their bids. Trump has long had a hostile relationship with CNN and other major news organisations, branding them “fake news” and attacking them repeatedly on social media. His insistence that CNN end up in friendly hands appears to favour the Paramount bid – even though the Netflix deal would also involve selling off the news network to an as-yet-unknown buyer. Since David Ellison took over Paramount earlier this year, the company has named journalist Bari Weiss as editor-in-chief of CBS News. Weiss is a prominent critic of what she calls bias in mainstream media, and the appointment won praise from conservatives who have long accused mainstream outlets of liberal bias. Days before Ellison took the reins of CBS, The Late Show with Stephen Colbert, a late-night staple and major Trump critic, was cancelled. But Trump railed against Paramount and Ellison on Monday, posting on Truth Social that “THEY ARE NO BETTER THAN THE OLD OWNERSHIP” for allowing an interview with Marjorie Taylor Greene, a political ally-turned-critic. Netflix, by contrast, is closely associated with Democrats, with founder Reed Hastings a major Democratic Party donor. – AFP

People walk into Paramount Studios at the Melrose Gate in Los Angeles. – AFPPIC