WSJ What’s News — PM Edition (September 19, 2025)

Episode Overview

This episode covers key business and political developments shaping markets, with a deep dive into:

• The new TikTok deal outlined between the US and China
• Market updates and government funding drama in Congress
• The implications of the latest Federal Reserve interest rate cut on US government debt payments
• The resurgence of hard drives amid the AI boom

Key Discussion Points & Insights

1. US–China TikTok Deal Update

[01:18–04:16]

• Context: President Trump and President Xi have approved a preliminary agreement allowing a consortium of U.S. investors, including Oracle and Silverlake, to take control of TikTok’s U.S. operations.
• Ownership structure:
  • US consortium: ~50%
  • Existing investors: ~30%
  • ByteDance (China): <20%
• Tech & Security: The new entity will use algorithms “reengineered for the U.S. market” but licensed from ByteDance.
• Status: The agreement is preliminary—many details, especially legal and technical compliance, are yet to be finalized.
• Quote:
  • “Some people thought that the deal was totally done. In reality, it seems more like the preliminary agreement is done for the structure and what the deal will look like and generally who's involved.” – Amrith Ramkumar [02:05]
• Timing: Unclear—ongoing discussions expected at the upcoming APEC summit.

2. Market Summary & Government Funding Standoff

[04:22–06:47]

• Market Moves:

  • Nasdaq: +0.7% (led today’s gains)
  • S&P 500: +0.5%
  • Dow: +0.4%
  • Weekly: S&P +1.2%, Dow +1.1%, Nasdaq +2.2%

• Congressional Deadlock:

  • Senate Democrats blocked a GOP stopgap measure (44–48 vote). They are demanding over $1 trillion in healthcare subsidies, including ACA extensions.
  • Government shutdown looms as leaders revisit negotiations.
  • “The move sets up a down to the wire negotiation over how to avoid a government shutdown in two weeks.” – Alex Osola [05:12]

• Other Headlines:

  • White House seeks approval for $6 billion in arms sales to Israel despite regional controversy.
  • Judge strikes down President Trump’s $15 billion defamation suit against the New York Times.

3. Feature — Can Lower Fed Rates Fix Government’s Debt Problem?

[07:16–09:26]

• Key Issue: The U.S. now pays about $1 trillion annually in interest on the national debt.

• Will the Fed Rate Cut Help?

  • Short answer: Not much, and not quickly.
  • Reason: Most government debt is long-term, insulated from immediate changes in short-term rates.
  • “When the Fed lowers interest rates, it doesn’t necessarily affect the rates on long-term debt. ... When investors are thinking, oh, we want to lend money to the US for the long term, they're looking at factors that go well beyond what the federal funds rate is right now.” – Richard Rubin [07:37 & 08:10]
  • Short-term bills may see a quick impact, but 80% of debt is long-term.

• Other Options for Lowering Interest Cost:

  • Shift issuance toward short-term debt when rates are low
  • Rebalance the 80/20 long-term to short-term ratio
  • But these are marginal changes given the $30 trillion debt load.

• Quote:

  • “The biggest thing that’s going to affect the interest costs in the long run are how much debt the US continues to rack up.” – Richard Rubin [08:29]

4. The AI Boom’s Surprising Winner: Hard Drives

[09:29–11:21]

• Context: Western Digital and Seagate — the two largest hard drive makers — posted ~30% revenue growth in their latest quarters.

• Drivers:

  • Demand for storage from generative AI applications, which consume and produce large datasets.
  • Legacy spinning disks (HDDs) remain vital alongside flash storage, thanks to the sheer volume required for AI workloads.

• Investor Reaction:

  • Stocks have nearly doubled in a year; companies are still relatively cheap by P/E ratio standards.
  • “From an investor perspective, these companies are still pretty attractively valued despite their recent uptick in price and their prospects as businesses going forward.” – Asa Fitch [10:50]

Notable Quotes & Memorable Moments

• Amrith Ramkumar on TikTok Deal:
  “They are having to get creative to comply with the law and make everyone happy with the national security restrictions that they’re being fulfilled.” [03:10]
• Alex Osola on Congressional Stalemate:
  “Democrats are demanding more than $1 trillion in health care subsidies as the price of their support, including extending enhanced Affordable Care act subsidies and restoring cut Medicaid funds.” [04:47]
• Richard Rubin on Debt:
  “The kinds of changes we’re talking about here are really just on the edges.” [09:13]
• Asa Fitch on Hard Drives:
  “Those disks, those old school hard drives, still have a big place in the world and especially in the AI era.” [10:13]

Timestamps for Key Segments

• TikTok Deal Explained: 01:18–04:16
• Markets & Government Funding Deadlock: 04:22–06:47
• Feature – Fed Rates & U.S. Debt: 07:16–09:26
• Spotlight – Hard Drives & AI Boom: 09:29–11:21

This summary captures the core headlines, expert analysis, and market context offered in the episode, providing clear insights and speaker perspectives for those who missed the show.