Advisornomics

Economics for financial professionals.

[Advisornomics @advisornomics]

UPCOMING: The Federal Reserve meets June 16-17.

Here is what to watch:

A hold of 3.50%-3.75% is virtually certain amid rising inflation due to the energy shock. CME FedWatch priced in a 97.4% probability of no change, and 72 of 102 economists surveyed by Reuters expect rate cuts to stay put through the end of 2026.

The story is everything around it.

May CPI hit 4.2% y/y, the highest reading since April 2024, driven by energy price spikes tied to the Iran conflict. The labor market added 172K jobs in May, well above expectations. The price stability component of the Fed's dual mandate is at risk.

The committee is expected to formally drop its easing bias and shift to a neutral policy stance. The May meeting already showed the cracks with an 8-4 vote to hold, the first such dissent since 1992.

Kevin Warsh is presiding over his first FOMC meeting as the 17th Fed Chair, sworn in just 25 days ago. His press conference at 2:30PM ET on June 17 is expected to be the most watched moment in American finance this year.

Warsh has publicly signaled fewer press conferences as a future possibility, along with eliminating the dot plot, and a preference for greater strategic ambiguity. He believes that too much forward guidance creates volatility in the markets.

Warsh's first words after the decision will tell us more.

[Advisornomics @advisornomics]

@SawyerMerritt SpaceX is positioning itself as not only a rocket company, but a leading AI giant.

https://t.co/n21Bed1CRB

[Advisornomics @advisornomics]

JUST IN: SpaceX has agreed to acquire AI coding startup Cursor for $60 billion.

Here are the key details:

SpaceX entered a plan of merger on June 16 via X67, a wholly owned SpaceX subsidiary created to facilitate the deal. The acquisition is expected to close in Q3 2026, pending regulatory approval.

If terminated, SpaceX owes a $10B termination fee, plus an additional $4B if the deal falls through on antitrust grounds. At a $2.8T market cap, $SPCX's risk exposure is minimal.

This didn't come out of nowhere:

xAI hired two of Cursor's senior engineering leaders earlier this year in April, and rented data center capacity directly to Cursor. SpaceX merged with xAI earlier this year. Cursor is the next piece.

Microsoft had previously examined a potential acquisition of Cursor. OpenAI had also approached the startup on two separate occasions.

Microsoft was circling. SpaceX moved first and moved with $60 billion.

This is a direct shot at the major AI labs. Elon Musk is buying the infrastructure they all depend on, and rapidly closing the competitive gap.

[Advisornomics @advisornomics]

@wliang SpaceX is positioning itself as a leading AI company through the acquisition, in competition with major AI labs.

Here are the key details of the deal:

https://t.co/n21Bed1CRB

[Advisornomics @advisornomics]

JUST IN: SpaceX has agreed to acquire AI coding startup Cursor for $60 billion.

Here are the key details:

SpaceX entered a plan of merger on June 16 via X67, a wholly owned SpaceX subsidiary created to facilitate the deal. The acquisition is expected to close in Q3 2026, pending regulatory approval.

If terminated, SpaceX owes a $10B termination fee, plus an additional $4B if the deal falls through on antitrust grounds. At a $2.8T market cap, $SPCX's risk exposure is minimal.

This didn't come out of nowhere:

xAI hired two of Cursor's senior engineering leaders earlier this year in April, and rented data center capacity directly to Cursor. SpaceX merged with xAI earlier this year. Cursor is the next piece.

Microsoft had previously examined a potential acquisition of Cursor. OpenAI had also approached the startup on two separate occasions.

Microsoft was circling. SpaceX moved first and moved with $60 billion.

This is a direct shot at the major AI labs. Elon Musk is buying the infrastructure they all depend on, and rapidly closing the competitive gap.

[Advisornomics @advisornomics]

@aleabitoreddit The acquisition cost and fees if the deal falls through are negligible given SpaceX's market cap.

You can see the key details here:

https://t.co/n21Bed1CRB

[Advisornomics @advisornomics]

JUST IN: SpaceX has agreed to acquire AI coding startup Cursor for $60 billion.

Here are the key details:

SpaceX entered a plan of merger on June 16 via X67, a wholly owned SpaceX subsidiary created to facilitate the deal. The acquisition is expected to close in Q3 2026, pending regulatory approval.

If terminated, SpaceX owes a $10B termination fee, plus an additional $4B if the deal falls through on antitrust grounds. At a $2.8T market cap, $SPCX's risk exposure is minimal.

This didn't come out of nowhere:

xAI hired two of Cursor's senior engineering leaders earlier this year in April, and rented data center capacity directly to Cursor. SpaceX merged with xAI earlier this year. Cursor is the next piece.

Microsoft had previously examined a potential acquisition of Cursor. OpenAI had also approached the startup on two separate occasions.

Microsoft was circling. SpaceX moved first and moved with $60 billion.

This is a direct shot at the major AI labs. Elon Musk is buying the infrastructure they all depend on, and rapidly closing the competitive gap.

[Advisornomics @advisornomics]

@unusual_whales This is a strategic move to increase coverage in competition with major AI labs.

Read the key details of the historic acquisition:

https://t.co/n21Bed1CRB

[Advisornomics @advisornomics]

JUST IN: SpaceX has agreed to acquire AI coding startup Cursor for $60 billion.

Here are the key details:

SpaceX entered a plan of merger on June 16 via X67, a wholly owned SpaceX subsidiary created to facilitate the deal. The acquisition is expected to close in Q3 2026, pending regulatory approval.

If terminated, SpaceX owes a $10B termination fee, plus an additional $4B if the deal falls through on antitrust grounds. At a $2.8T market cap, $SPCX's risk exposure is minimal.

This didn't come out of nowhere:

xAI hired two of Cursor's senior engineering leaders earlier this year in April, and rented data center capacity directly to Cursor. SpaceX merged with xAI earlier this year. Cursor is the next piece.

Microsoft had previously examined a potential acquisition of Cursor. OpenAI had also approached the startup on two separate occasions.

Microsoft was circling. SpaceX moved first and moved with $60 billion.

This is a direct shot at the major AI labs. Elon Musk is buying the infrastructure they all depend on, and rapidly closing the competitive gap.

[Advisornomics @advisornomics]

@StockSavvyShay We agree, SpaceX is moving beyond infrastructure to the actual product by acquiring Cursor. This could put SpaceX and xAI on the same level as major AI labs.

Here are the key details about the acquisition:

https://t.co/n21Bed1CRB

[Advisornomics @advisornomics]

JUST IN: SpaceX has agreed to acquire AI coding startup Cursor for $60 billion.

Here are the key details:

SpaceX entered a plan of merger on June 16 via X67, a wholly owned SpaceX subsidiary created to facilitate the deal. The acquisition is expected to close in Q3 2026, pending regulatory approval.

If terminated, SpaceX owes a $10B termination fee, plus an additional $4B if the deal falls through on antitrust grounds. At a $2.8T market cap, $SPCX's risk exposure is minimal.

This didn't come out of nowhere:

xAI hired two of Cursor's senior engineering leaders earlier this year in April, and rented data center capacity directly to Cursor. SpaceX merged with xAI earlier this year. Cursor is the next piece.

Microsoft had previously examined a potential acquisition of Cursor. OpenAI had also approached the startup on two separate occasions.

Microsoft was circling. SpaceX moved first and moved with $60 billion.

This is a direct shot at the major AI labs. Elon Musk is buying the infrastructure they all depend on, and rapidly closing the competitive gap.

[Advisornomics @advisornomics]

JUST IN: SpaceX has agreed to acquire AI coding startup Cursor for $60 billion.

Here are the key details:

SpaceX entered a plan of merger on June 16 via X67, a wholly owned SpaceX subsidiary created to facilitate the deal. The acquisition is expected to close in Q3 2026, pending regulatory approval.

If terminated, SpaceX owes a $10B termination fee, plus an additional $4B if the deal falls through on antitrust grounds. At a $2.8T market cap, $SPCX's risk exposure is minimal.

This didn't come out of nowhere:

xAI hired two of Cursor's senior engineering leaders earlier this year in April, and rented data center capacity directly to Cursor. SpaceX merged with xAI earlier this year. Cursor is the next piece.

Microsoft had previously examined a potential acquisition of Cursor. OpenAI had also approached the startup on two separate occasions.

Microsoft was circling. SpaceX moved first and moved with $60 billion.

This is a direct shot at the major AI labs. Elon Musk is buying the infrastructure they all depend on, and rapidly closing the competitive gap.