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Budget airlines look for $2.5B in return for warrants. (0:15) Tillis hints at Powell stay as Fed governor. (1:05) DeepSeek cuts V4-Pro pricing as AI cost competition intensifies. (2:10)

The following is an abridged transcript:

A group of U.S. budget airlines, including Frontier Group (ULCC) and Avelo Airlines, is seeking about $2.5B in federal aid in exchange for warrants that could convert into equity stakes, the Wall Street Journal reports.

The carriers based that figure on projected incremental jet fuel costs this year, assuming prices stay above $4 per gallon. Low-cost operators have been squeezed by higher fuel and labor costs amid weaker pricing power in a competitive domestic market.

Airline executives met last week in Washington with Transportation Secretary Sean Duffy and FAA Administrator Bryan Bedford. Talks on a potential aid package are ongoing.

Separately, Spirit Airlines (FLYYQ) is discussing a possible $500M support package with U.S. officials.

Other low-cost peers such as Allegiant Travel (ALGT) and Sun Country Airlines (SNCY) face similar pressures, while larger carriers including United (UAL) and American (AAL) have also trimmed outlooks.

As noted on Sunday’s Wall Street Brunch, Sen. Thom Tillis (R-N.C.) said the confirmation process for Kevin Warsh as Federal Reserve chairman will move forward, while also raising the possibility that current Chair Jay Powell could remain on the Board of Governors.

Speaking on NBC’s “Meet the Press,” Tillis said the Department of Justice will appeal Judge James Boasberg’s ruling quashing subpoenas tied to the Fed, but stressed the appeal is limited in scope.

“That appeal is simply to challenge the basis for the ruling on the motion to quash the subpoenas,” Tillis said.

Powell “will have to make his own decisions” about whether to leave before his term expires in 2028, Tillis added, suggesting Powell may wait until the appeal is fully resolved. “And then we can move on and let the Fed be independent.”

Prediction markets still show elevated odds of Powell exiting before year-end — above 80% — though near-term departure odds have eased since Friday’s DOJ announcement. On Polymarket, odds of Powell leaving before May 31 have slipped to 43% from 53%, while Kalshi shows a 51% chance of departure before June 30, down from a 64% peak Friday.

Chinese AI startup DeepSeek (DEEPSEEK) is offering a 75% discount on its new DeepSeek-V4-Pro model through May 5.

The steep price cut intensifies cost competition in the global AI market. The company said it has reduced input cache-hit pricing across its API suite to one-tenth of previous levels.

The move comes alongside a preview launch of its V4 model family, which includes two variants: V4-Pro, a higher-performance premium model, and V4-Flash, a lighter and more cost-efficient version.

DeepSeek’s V4 models have been adapted to run on Huawei chip technology, underscoring China’s push toward domestic hardware ecosystems. The models are designed with AI agent applications in mind.

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In premarket trading, stock index futures (SPX) (INDU) (US100:IND) are cautious to start the week, with five Magnificent 7 companies reporting earnings and a Fed decision on deck.

In geopolitics, after the U.S. opted not to send envoys to Pakistan for Iran peace talks, Tehran has reportedly floated reopening the Strait of Hormuz while postponing discussions over its nuclear program.

And there are no major economic releases to begin the week.

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