Fed Day Calm, Corporate Storm - Rate Hold Expected as Leadership Shuffle Looms

97%. That's the probability the Federal Reserve will hold rates steady today. Nearly certain, yet markets aren't watching the rates—they're watching the chair.

The Foregone Conclusion with a Twist

At 2 p.m. ET today, Jerome Powell will announce what everyone already knows: interest rates are staying put. CME's FedWatch shows a 97% likelihood of no change, making this one of the most predictable Fed decisions in recent memory.

But the real drama lies elsewhere. Donald Trump's pick to replace Powell could be announced as soon as this week, and prediction markets are buzzing. BlackRock's fixed income chief Rick Rieder leads the race, followed by former Fed Governor Kevin Warsh. The timing isn't coincidental—Powell recently disclosed he's under criminal investigation, adding urgency to the succession question.

CNBC's Fed survey suggests only two quarter-point cuts this year, signaling the market has embraced the central bank's patient approach. Even with recent disagreements within the Fed, the institution seems committed to staying the course in the near term.

Corporate Fortunes Diverge

While the Fed maintains its measured pace, corporate America is experiencing whiplash. Starbucks surged over 7% this morning after reporting stronger-than-expected revenue and its first traffic growth in two years. CEO Brian Niccol credited the turnaround plan, with holiday offerings like the viral "Bearista" cup driving same-store sales growth for a second straight quarter.

At the other extreme, Amazon delivered a shock this morning: 16,000 corporate jobs are being cut in the company's second major layoff since October. The e-commerce giant cited "removing bureaucracy" as the reason, though some cloud division employees learned about "organizational changes" through an apparently misdirected email yesterday.

Amazon didn't stop there. The company announced it's closing its Fresh supermarket and Go convenience store chains, converting some locations to Whole Foods. Grocery chief Jason Buechel told employees the company needs to make "deliberate choices" to build momentum—corporate speak for strategic retreat.

End of an Era, Start of Another

Southwest Airlines officially ended its 53-year open-seating policy yesterday, bowing to customer demands and investor pressure for higher revenues. The Dallas-based carrier will now offer premium seats near the front of planes, marking a fundamental shift in its business model.

The change represents more than operational adjustment—it's a symbol of how even the most entrenched corporate cultures eventually bend to market forces. CNBC's Leslie Josephs, who flew on both the last open-seating flight and one of the first assigned-seat flights, witnessed this historic transition firsthand.

Political Tensions Escalate

Beyond corporate boardrooms, political tensions are reaching a boiling point. House Democrats announced impeachment hearings against Homeland Security Secretary Kristi Noem unless Trump fires her, following the killing of two U.S. citizens by federal agents in Minneapolis. Democrats are also threatening to oppose DHS funding, potentially triggering a partial government shutdown starting Saturday.

Trump, whose administration has tried to ease its stance on the killings, said yesterday he wants to "de-escalate a little bit" in Minnesota and called for "a very honorable and honest investigation" into the death of Alex Pretti, who was fatally shot by federal agents over the weekend.

The Price of Political Engagement

Meanwhile, Tesla's brand value dropped $15.4 billion last year—a 36% decline—as CEO Elon Musk ventured deeper into politics, according to research firm Brand Finance. The finding illustrates how political engagement, even by celebrated entrepreneurs, can exact a measurable cost on corporate value.