A Fed Governor Said He’s Inclined To Keep Rates Unchanged. Yields Fell And Stocks Had Their Best Day In Weeks.

Stocks jumped on Thursday and bond yields fell after a Federal Reserve member said he's inclined to keep interest rates unchanged unless there is a big inflationary surprise before the central bank's next meeting.

The S&P 500 climbed 1.06%, while the Dow Jones Industrial Average did so 1.18%. The tech-heavy Nasdaq Composite overperformed, gaining 1.40%.

Speaking to Reuters, Fed Governor Christopher Waller noted that inflation is "meaningfully above" the Fed's 2% target, but claimed that current trends "suggest we are finally seeing some signs of disinflation."

"If this continues in the data due over the next two weeks, I would be inclined to support holding the target for the federal funds rate at its current setting," he added.

However, he did say that "it may not take much acceleration in inflation to nudge me into supporting tighter policy."

"If there is evidence that progress toward 2% inflation reversed in August, a small adjustment in our stance would help ensure that it resumes," Waller said.

Other Fed members, however, have struck a more hawkish tone. Michael Barr said this week he will support an interest rate hike if inflation doesn't ease.

Fed Chair Kevin Warsh also appeared to anticipate he is prepared to support a more hawkish policy if prices remain above the central bank's target.

Elsewhere, OpenAI released its latest model, GPT-6 Astra, with company President Greg Brockman calling it the beginning of the artificial general intelligence (AGI) era.

"I think it might be about this model," Brockman told press when asked if it could in fact herald AGI.

The company claimed that Astra is a step closer to AI agents doing complex work on their own. The model was built by using more than 100,000 GPUs in its Texas site. It is also the first model to use other ones to supervise its training.

GPT-6 Astra will initially be available to a limited amount of organizations but will soon expand to ChatGPT Plus, Pro, Business and Enterprise customers and API developers.

Before the release, company CEO Sam Altman said future models will force companies to move more cautiously as their capabilities increasingly outpace the safeguards designed to control them, adding that OpenAI is already slowing parts of its development.

"The next generation of models are going to be sobering for everybody," Altman told Axios during the G20 Innovation Ministerial in Chapel Hill, North Carolina, this week. He added companies may increasingly have to pace model releases around advances in alignment and safety rather than simply how quickly new capabilities can be developed.

OpenAI disclosed this week that Astra has reached what the company calls its "Critical" cybersecurity capability threshold. According to OpenAI, the model can, when equipped with the necessary tools and access, discover previously unknown security vulnerabilities and develop methods to exploit them across well-protected computer systems without a human directing each step. Astra is the first OpenAI model to trigger the company's stricter safeguards for critical cyber capabilities.