July 2 Member Morning Briefing: ADP Weak Employment Fails to Reverse Rate Hike Bets; Walsh Emphasizes 'Prices Too High'

【Weak ADP Jobs Data Fails to Reverse Rate Hike Bets】 Payroll processor ADP reported Wednesday that the private sector added only 98k jobs in June, below market expectations (the Dow Jones survey median was 110k, with some institutions anticipating as high as 118k), and a significant slowdown from the unrevised 122k in May. Nearly half of the increase (48k) came from education and health services, a long-time leading sector. Aside from 2,000 jobs, virtually all gains came from the services sector: trade, transportation, and utilities added 15k; financial activities added 14k; while natural resources and mining lost 5,000, the only sector to contract.

【Warsh Emphasizes "Prices Are Too High"] On Wednesday, July 1, Eastern Time, Federal Reserve Chairman Kevin Warsh, just six weeks into his tenure, made his international policy debut at the European Central Bank's annual central banking forum in Sintra, Portugal. He shared the stage with ECB President Lagarde, Bank of England Governor Bailey, and Bank of Canada Governor Macklem, participating in a policy panel Q&A moderated by a CNBC host. The entire focus was on one thing: markets wanted to extract any hint of rate cuts from the new chairman, and he didn't give them a single word. Warsh reiterated that fighting inflation is the Fed's overriding task. "We look around and see prices are too high," he said. "We are in the price stability business." He stated bluntly that if households, businesses, or financial markets believe the Fed will tolerate inflation above 2%, "they will be disappointed" — "We will deliver price stability in the United States."

【U.S. Commerce Department Overnight Lifts Export Controls on Anthropic】 The U.S. Commerce Department late on June 30 lifted export controls on two of Anthropic's cutting-edge models, Fable 5 and Mythos 5, ending the 18-day standoff that had shaken the global AI industry. The company said Fable 5 would be reopened to global users starting Wednesday. After restoration, Fable 5 will offer Pro, Max, Team, and some enterprise users up to 50% of their weekly usage quota until July 7.

【Meta Plans to Sell Surplus Compute Power】 According to a Bloomberg report Wednesday, Meta is building a cloud computing business to sell surplus AI computing power, seeking returns on its massive AI investments. The internal project, codenamed "Meta Compute," follows a dual-track model: one is selling "bare metal" raw computing power, directly competing with Neoclouds like CoreWeave; the other is providing hosted model access on its own infrastructure, akin to AWS Bedrock, including its newly launched Muse Spark model.

【Trump's Wealth Source Shifts from Real Estate to Tokens for First Time】 The U.S. Office of Government Ethics (OGE) released Trump's financial disclosure for the first year (2025) of his second term, spanning 927 pages. Cryptocurrency has become his largest single source of income last year, far exceeding the combined income from real estate, licensing, and legal settlements. By different statistical measures, his crypto-related income is approximately $1.2 billion to $1.4 billion; combining all businesses, the disclosed total income for 2025 is at least about $2.24 billion, compared to only about $622 million in 2024 before returning to the White House. Forbes estimates his net worth has risen from $2.3 billion in 2024 to about $6 billion.