A Fool's Errand

    President Trump has issued blanket tariffs on all international trade partners in an attempt of “PURSUING RECIPROCITY TO REBUILD THE ECONOMY AND RESTORE NATIONAL AND ECONOMIC SECURITY.” However, the result of which has given adverse effects. 

    To elaborate,  S&P 500, NASDAQ, and international stock markets have crashed this past week. With the S&P 500 falling by 10%, NASDAQ falling 5.8%, and international stock falling between 5 and 7%. Additionally banks have become weary of a recession; and unemployment is projected to climb up to 5.3%. 

    Unless you plan on shorting stocks or are a large corporation in the US, this is dreadful. The latter being a majority of the US population. I am utterly clueless in how these policies will benefit the common man, the consumer, the people in any way. I believe that this pursuit to “rebuild the economy” may ultimately cause irreparable damages.

Sources:

https://www.nytimes.com/live/2025/04/04/business/trump-tariffs-stocks-economy 

https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/

Trump Confirms 25% Auto Tariffs on Foreign-Made Cars: A New Jolt to Global Trade

In a recent article, The Economic Times reported that former President Donald Trump has confirmed a 25% tariff on all foreign-manufactured automobiles if he returns to office. The move, according to Trump, is aimed at boosting U.S. car manufacturing and reducing reliance on imports. However, this announcement has sparked serious concerns about the potential economic and diplomatic fallout.

The Policy Announcement

Trump declared that all foreign-made automobiles, regardless of their country of origin, will be subject to the tariff. This blanket policy would impact major global automakers including Japanese, Korean, German, and even some American companies that manufacture cars abroad. Trump argues that this measure will bring manufacturing jobs back to the U.S., strengthen national security, and protect American industries from unfair foreign competition.

Potential Economic Effects

1. Consumer Prices: A 25% tariff would likely drive up prices for imported vehicles, affecting consumer choice and affordability. Many Americans rely on affordable foreign-made cars. As prices rise, the demand for U.S.-made alternatives might increase, but so will overall costs.

2. Automaker Disruption: Major global car manufacturers with production bases in Mexico, Canada, Germany, Japan, and South Korea could face significant disruptions. Even U.S. companies like Ford and GM, which assemble vehicles overseas, may be impacted, possibly leading to supply chain reconfigurations.

3. Trade Retaliation: Countries affected by this tariff could respond with retaliatory tariffs on U.S. exports, escalating trade tensions and potentially hurting sectors like agriculture, machinery, and services. These dynamics can strain diplomatic relationships and global market stability.

Broader Implications

While the policy is framed as pro-American industry, it reflects a broader protectionist agenda that departs from the free-trade principles long championed by global economic institutions. Critics argue that such a tariff could isolate the U.S. from its trade partners and lead to inefficiencies in both production and consumption.

Furthermore, the policy may not guarantee a return of manufacturing jobs, as automation and labor costs continue to influence where and how cars are made. The tariff could also complicate U.S. compliance with trade agreements under organizations like the WTO.

Trump’s proposed 25% auto tariff marks a dramatic shift in U.S. trade strategy, with significant implications for global commerce, consumer welfare, and international relations. Whether this move results in domestic job growth or economic disruption will depend heavily on how other countries respond and how industries adapt. As always, protectionism has both winners and losers—and the long-term effects remain uncertain.

Source: The Economic Times. (April 2, 2025). "Donald Trump confirms 25% auto tariffs on all foreign-made automobiles."

Tariffs to Spike Inflation

     As President Donald Trump prepares to announce a new round of tariffs, the economic landscape is bracing for significant shifts. A recent report from Goldman Sachs outlines the potential repercussions of these tariffs, forecasting an alarming combination of rising inflation, increasing unemployment, and stagnant economic growth. The implications of these tariffs are profound, not just for the U.S. economy but for global markets as well.

     Goldman Sachs anticipates that tariff rates could increase by as much as 15 percentage points, a scenario that now appears more likely as the decision day approaches. This increase, although expected to be moderated by eventual product and country exclusions, signals a tough road ahead for consumers and businesses alike. A projected inflation rate of 3.5% by 2025, significantly above the Federal Reserve’s target of 2%, could erode purchasing power and squeeze household budgets.

     The forecasted economic growth of just 0.2% in the first quarter and a meager 1% for the full year is troubling. Such low growth rates, combined with an expected unemployment rate of 4.5%, paint a picture of an economy struggling to gain momentum. The increased likelihood of a recession—now pegged at 35%—raises concerns reminiscent of the stagflation experienced in the late 1970s and early 1980s, when high inflation coexisted with stagnant economic growth.

     Goldman's insights indicate that this time, the Federal Reserve may take a different approach. While past economic crises have led to aggressive interest rate hikes, Goldman now forecasts three rate cuts within 2025. This shift suggests that the Fed is prepared to prioritize economic support over inflation containment. However, the effectiveness of such rate cuts in combating inflation without further destabilizing the economy remains uncertain.

     The potential for an across-the-board tariff increase of 20% on U.S. trading partners would exacerbate these challenges, leading to increased costs for consumers and businesses, reduced international trade, and a further slowdown in economic growth. The ripple effects of these tariffs could extend beyond U.S. borders, affecting global supply chains and economic stability worldwide.

     In summary, as decision day approaches, the proposed tariffs represent more than just a trade policy shift; they embody a critical juncture for the U.S. economy. The interplay of rising inflation, stagnant growth, and potential recessionary pressures could create a challenging environment for policymakers and consumers alike. The coming weeks will be crucial in determining how these economic forecasts play out and what measures will be taken to mitigate their impact. 

Article Link: https://www.cnbc.com/2025/03/30/tariffs-to-spike-inflation-stunt-growth-and-raise-recession-risks-goldman-says-.html

Trump Administration Slashes Planned Parenthood Funding — What It Means for Reproductive Health

On March 31, 2025, the Trump administration announced a sweeping cut to federal funding for Planned Parenthood, eliminating tens of millions of dollars in grants to affiliates that offer abortion referrals. While these funds were never used for abortion services due to existing federal law (the Hyde Amendment), the administration claims the cuts are part of an effort to ensure that taxpayer dollars don’t indirectly support organizations involved in abortion access.

This move marks a major shift in reproductive health policy and escalates a long-standing political fight. For many Americans, especially low-income individuals and marginalized communities, Planned Parenthood is a lifeline, offering not just reproductive services, but cancer screenings, birth control, STI testing, prenatal care, and general health checkups.

Planned Parenthood officials warned that the funding cuts could force clinic closures and staff reductions, leading to reduced access in areas where alternative providers are few or nonexistent. Public health advocates are particularly concerned about rural regions and communities of color, where reproductive health care is already under strain.

While the administration frames this as a move to protect “the sanctity of life,” critics view it as a politically motivated attack on comprehensive healthcare. With election season heating up, the debate over funding reproductive health services is once again center stage, and the people most affected are often those with the fewest resources.

As legal battles and policy fights continue, one thing is clear: the consequences of this decision will ripple far beyond Planned Parenthood, shaping access to care for millions across the country.

https://www.politico.com/news/2025/03/31/trump-admin-cuts-tens-of-millions-from-planned-parenthood-00261763

Core inflation in February hits 2.8%, higher than expected

    The core PCE price index measured at 2.8% for the past 12 months at the end of February. The core PCE price index is the Fed's preferred measure of inflation. Consumer spending also was slightly below projections, sitting at a growth of 0.4%, whereas projections were calling for 0.5%. The immediate cause for the aggravated inflation rate not going back down to the Fed's goal of 2% seems to be tariff related. The Fed's timeline for cutting interest rates seems to have been slowed down by this lingering inflation. The article makes a point that tariffs are normally considered, "...as one-off events that do not feed through to longer-lasting inflation pressures," but in this case the all encompassing nature of Trump's tariffs could possibly lead to an aggressive global trade war. That is to say, all of this uncertainty is being reflected in the numbers. 

https://www.cnbc.com/2025/03/28/pce-inflation-february-2025-.html

Inflation Ran High in February as Consumer Spending Increased

 This February, the Personal Consumption Expenditures (PCE) Price Index increased 0.3% for the month and 2.8% year. This exceeded the Federal Reserve's 2% objective, telling us that U.S. inflation remained high this month. After a drop in January, consumer spending grew by 0.4%, but the real gain was only 0.1% after accounting for inflation. Purchases of durable items accounted for a significant amount of the spending growth, potentially in anticipation of Trump's anticipated tariffs, which could raise costs even more.

The current level of inflation, along with anticipated tariffs, has caused consumer sentiment to decline. Inflation forecasts are now at 5%, which is their highest level in years. According to these patterns, people are becoming more and more cautious about rising prices even when spending is staying the same, and policymakers may need to take further steps to reduce inflation without slowing economic growth.

www.usnews.com/news/economy/articles/2025-03-28/inflation-ran-a-little-hotter-in-february-as-spending-rose

Donald Trump is planning on Introducing a 25% tariff on imported cars starting April 2nd

 Donald Trump is planning on Introducing a 25% tariff on imported cars starting April 2nd, which is aimed at bringing car manufacturing back to America. In the long term, carmakers must decide whether to overhaul their supply or tank the losses with the possibility that these tariffs change or get reversed. Moving production to the U.S. would cost a lot in time and money. This change would require factories to be revamped and new infrastructure to be created. Ironically, even Tesla, which manufactures in America, relies on imported parts and will also be impacted from these new policies. Predictions say car sales could drop by 1-2.5 million units this year due to higher prices. This policy will impact both new and expensive cars as well as older or lower end models. The impact of these tariffs will likely lead to fewer, more expensive cars and limit choices for American consumers.

https://www.economist.com/business/2025/03/31/donald-trumps-plan-for-american-carmaking-is-full-of-potholes

Projected GDP for Q1 Decreases by 2%

Originally in the 4th quarter of 2024, there was a projected GDP growth of 2.3%. However, projections now indicate a growth at merely 0.3%. This would be a relatively weak amount of growth in the years following COVID. The slowing growth of the country is beginning to worry experts, investors, and citizens alike. As uncertainty of the economy remains steady, it is unclear whether or not Trump's policies will steer America to a negative path.

The growth rate will slowly build back up towards what is currently projected, with forecasts of 1.4% growth in Q2, 1.6% in Q3, and 2% in Q4. Though with projections having decreased as of late, it is unclear as to whether or not these predictions will successfully predict a steady increase in GDP growth. One thing is clear in this time of uncertainty, the administration will want to rethink their strategies if they wish to get themselves out of the hole they’ve put themselves in, and begin to grow at a steady rate once more. 

 https://www.cnbc.com/2025/03/31/first-quarter-gdp-growth-will-be-just-0point3percent-as-tariffs-stoke-stagflation-conditions-says-cnbc-survey.html

U.S Tariff Drama increase

 

Jeremiah Osei

President Donald Trump has declared April 2, 2025, as "Liberation Day," a day for announcing new tariffs to reduce the U.S.'s reliance on foreign goods. According to USA Today, Trump's plan to announce tariffs on Wednesday targets all countries to curb foreign goods, potentially raising prices but encouraging U.S. investment. Trump claims his tariffs won't just target nations that contribute most to the U.S. trade deficit.

“You’d start with all countries,” Trump told reporters aboard Air Force One Sunday night. “There’s not a cutoff.”  Trump's Goal with this is to force the U.S to  Export and produce things more domestically. Trump’s remarks provided clarification on the scope of the tariffs after Treasury Secretary Scott Bessent recently said that 15% of nations with persistent trade imbalances with the U.S. would be most impacted by the tariffs. Bessent has called these the “Dirty 15” countries.  How this will affect the geopolitical ramifications of Trump's tariff policies has been significant. By taking a more aggressive stance on trade, the U.S. under Trump distanced itself from long-standing allies and international trade agreements. The administration’s "America First" approach led to tensions within the World Trade Organization (WTO) and a reevaluation of multilateral trade agreements like the Trans-Pacific Partnership.

Site :https://www.usatoday.com/story/news/politics/2025/03/31/trump-tariffs-liberation-day-live-updates/82731267007/

FED Decides to Keep Rates Steady Amid Tariff War

The Federal Reserve’s Rate Decision: A Cautious Approach Amid Uncertainty

The Federal Reserve (Fed) recently left its policy rate unchanged at 4.25%–4.5% during its March meeting, signaling a patient approach to rate cuts amid heightened economic uncertainty. Significant shifts in U.S. trade, immigration, and fiscal policies have led Fed officials to revise their growth expectations downward while adjusting inflation forecasts upward. These changes have delayed the projected return to the Fed’s 2% inflation target and increased concerns about a potential economic slowdown.

Why the Fed Is Holding Rates Steady

The Fed faces a challenging economic environment where both inflation and recession risks are rising. While financial markets and survey data indicate growing concerns, the Fed remains cautious, emphasizing that the unemployment rate will be a key determinant in future rate decisions. If unemployment rises, rate cuts could be on the horizon; however, until then, Fed officials prefer to hold rates steady. The majority of officials have also revised their 2025 interest rate projections upward, suggesting a slower path toward easing monetary policy.

Revised Rate Path and Policy Shifts

Fed officials anticipate a gradual rate-cutting cycle, with the median projection showing 50 basis points of cuts in both 2025 and 2026. However, internal divisions have emerged, with a growing number of officials expecting to hold rates steady for longer. Uncertainty remains high, and policy pivots under the Trump administration have increased inflationary risks, further complicating the timing of rate adjustments. The March meeting highlighted the Fed’s balancing act: responding to inflation concerns while managing the risk of an economic downturn.

Economic and Market Implications

The Fed’s cautious stance has broad implications for the economy and financial markets. Bond markets may see a steeper yield curve as investors adjust to the prospect of prolonged higher rates. Consumer and business borrowing costs will remain elevated, potentially dampening economic activity in the near term. While inflation concerns persist, slowing economic growth and weaker consumer confidence may prompt the Fed to reconsider its stance later in the year. Additionally, a gradual reduction in the Fed’s balance sheet—particularly through a slower quantitative tightening (QT) process—will be closely monitored for potential market volatility.

Conclusion: A Delicate Balancing Act

The Fed’s decision to keep rates steady reflects its cautious approach to balancing inflation and growth risks. With economic uncertainty mounting and inflation expectations shifting, future rate cuts will depend on evolving labor market conditions and broader economic trends. Whether this strategy successfully navigates the challenges ahead or signals deeper economic concerns remains to be seen.

Article Link: https://www.pimco.com/gbl/en/insights/opposing-forces-complicate-the-feds-dual-mandate

The Impact of Trump's Tariffs on the Global Economy

The global economy in 2025 is facing a lot of uncertainty, largely because of recent political decisions and ongoing tensions around trade policies. In the U.S., President Trump’s tariff strategies are causing concerns about rising inflation and the possibility of economic slowdown. These tariffs have caused a lot of volatility in the markets, leading investors to flock to safer assets like gold. At the same time, the European Union is preparing its own countermeasures, which could also disrupt global trade. While some experts fear that these measures will stunt global growth, others believe that the world economy might still hold steady, thanks to key markets like China and the European Union. However, the overall outlook is less optimistic, with global growth projections dropping from 2.9% in 2024 to 2.3% in 2025. In the U.S., the Federal Reserve has also revised its GDP forecast for 2025 down to 1.7%, signaling a slowdown. With inflation in the U.S. expected to edge up to 2.7%, up from previous forecasts, it’s clear that the current economic situation will require careful monitoring. The combination of tariffs, inflationary pressures, and market uncertainty means that we might be heading into a period of economic instability, both in the U.S. and globally. As governments and economists adjust their strategies, the coming months will reveal how these policies play out and whether the global economy can weather the storm.

https://www.cnn.com/2025/03/26/economy/auto-tariffs-announcement/index.html

Consumer confidence in where the economy is headed hits 12-year low

 In March, U.S. consumer confidence experienced its fourth consecutive monthly decline where it reached a 12-year low. The Conference Board's consumer confidence index fell by 7.2 points to 92.9 which missed expectations of 94.5. The Expectations Index, which reflects consumers' short-term outlook on income, business, and labor market conditions, dropped 9.6 points to 65.2 which is significantly below the threshold of 80, signaling a potential recession. This decline suggests that concerns about the economy and labor market are increasingly influencing the financial decisions of individuals.

The decrease in consumer confidence can be attributed to growing anxieties over tariffs and persistent inflation, which remain above the Federal Reserve's 2% target. Major retailers like Walmart, Target, and Macy's have expressed concerns about economic uncertainties and adjusted their profit forecasts accordingly. Additionally, while purchasing intentions for homes and cars have declined, there has been an uptick in plans to buy big-ticket items like appliances. One reason for this could be that consumers aim to make purchases before anticipated tariff-induced price increases. These trends highlight the complex dynamics of consumer behavior amid economic uncertainty.

https://www.cnbc.com/2025/03/25/consumer-confidence-in-where-the-economy-is-headed-hits-12-year-low.html

Market Turbulence and the Business Cycle: A Quick Macroeconomic Snapshot

 This week’s sharp decline in U.S. stock markets over 700 points in the Dow and nearly 2% off the S&P 500 offers a real world glimpse into key macroeconomic forces at play.

The main driver: inflation. February’s core PCE index rose 2.8% year-over-year, fueling fears that the Federal Reserve may tighten monetary policy. In macro terms, this represents a potential shift from expansion to contraction, as higher interest rates reduce investment and slow growth.

Layered on top of inflation is uncertainty from newly announced tariffs. A 25% tax on imported cars acts like a negative supply shock raising costs, reducing output, and pushing the economy closer to stagflation. This shifts the short run aggregate supply curve left, increasing inflationary pressure while slowing GDP growth.

Consumer confidence is also dropping, which lowers aggregate demand. If households expect a downturn, they may cut back on spending creating a self-fulfilling slowdown.

In short, this moment ties together several key themes from our course: inflation dynamics, policy responses, supply shocks, and how expectations influence the business cycle. Watching the economy unfold in real time reinforces the importance of understanding national income and its fluctuations.

https://www.cnn.com/2025/03/28/investing/us-stocks-tariff-uncertainty-volatility/index.html

Copper Prices Surge Amid Tariff War and Global Demand

Tariffs and AI Are Driving Up Prices

Copper prices have surged to record highs, fueled by a combination of trade tensions, supply chain disruptions, and the increasing demand for critical metals in energy infrastructure. As the U.S.-China trade war intensifies, President Donald Trump’s proposed 25% tariff on copper imports has prompted American buyers to stockpile the metal, pushing prices up by 30% this year. Meanwhile, China, the world’s largest copper importer, is rolling out a stimulus program that could further increase demand, adding more pressure to an already tightening market.

Why Copper and Other Metals Matter More Than Ever

Copper is the backbone of modern infrastructure. It plays a vital role in everything from power transmission lines and batteries to LED lights and electric vehicles. The global shift toward clean energy, including solar and wind power, has already been driving up demand. However, there’s another major factor on the horizon: artificial intelligence.

AI’s Growing Need for Energy Infrastructure

The rapid expansion of AI technology is putting unprecedented strain on data centers, which require massive amounts of electricity to function. As companies invest in AI-driven applications, they’re also ramping up their energy consumption. This, in turn, increases the need for more efficient power grids, stronger transmission lines, and advanced cooling systems—all of which rely heavily on copper.

In fact, the International Energy Agency (IEA) expects copper demand to rise by 20% by 2030 and by 41% by 2040, as clean energy and AI continue to expand. Other metals, such as lithium and silver, are also becoming increasingly valuable due to their role in energy storage and electronic components.

Winners and Losers in the Copper Boom

Mining companies like Freeport-McMoRan and Southern Copper are already seeing gains as copper prices climb. But for industries that rely on the metal—such as construction, electronics, and manufacturing—the rising costs could mean tighter margins and higher prices for consumers.

• Construction: Copper is a key material in home wiring and plumbing. With prices soaring, homebuilders are facing increased costs, which could worsen inflation in the housing market.

• Electronics & Appliances: Everything from smartphones to refrigerators contains copper. Higher material costs may lead to more expensive consumer goods.

• Renewable Energy: Solar panels and wind turbines require significant amounts of copper. Rising prices could slow the transition to clean energy if production costs become too high.

The Future of Precious Metals and Energy Infrastructure

As AI technology and clean energy solutions continue to evolve, the demand for copper and other precious metals will only increase. While trade policies and supply chain challenges may cause short-term price fluctuations, the long-term trend points to a world that is more dependent on these metals than ever before.

Whether through tariffs, economic shifts, or technological advancements, the price of copper will remain a key indicator of how the global economy adapts to the needs of the future. For businesses, consumers, and governments alike, the challenge will be balancing demand with sustainability—and finding ways to secure these critical resources in an increasingly competitive market.

Article Link: https://www.usnews.com/news/business/articles/2025-03-26/copper-prices-have-soared-as-the-us-threatens-tariffs-on-the-metal-and-china-boosts-its-economy

Consumer Confidence Plumets

 U.S Consumer Confidence Plumets to 12-Year Low

The Consumer Confidence Index was released this past week in March. The index significantly declined, dropping 7.2 points to 92.9, marking the lowest level since early 2021. This is the fourth consecutive month that the index has decreased. Along with the consumer confidence decreasing, so did the expectations index, which is consumers' short-term outlook. 

Factors Contributing to the Decline

1. Tariff concerns

1. The new tariffs and their anticipation have raised economic uncertainty. Consumers and businesses are concerned about the tariffs and their impact on spending and earnings. 

2. Inflation

1. Constant inflation is part of eroding purchasing power over time. As recent articles stated, the consumer can expect it to rise to around 6.2%. Thus raising rental rates and affecting overall consumer sentiment.

3. Labor Market Concerns

1. Unemployment is not a concern due to its all-time low, but the main concern is the unease about job security. People look at their job landscape from an opposing viewpoint, which lowers consumer trust in their spending. 

Indexes’ Decreased Impact on the Economy

• Reduced Consumer Spending

• Retail Sector Strain

• Increase in Misery Index

• Combines Inflation and Unemployment rates

Conclusion

The index's decline challenges the U.S. economy, but concerns are piling up while the labor market remains strong. People are looking to address the issues to restore confidence and sustain economic growth. 

NBC Link

CNN Link

The probability of a recession is approaching 50%, Deutsche markets survey finds

    The chances of the United States entering a recession have increased to a 50%/50% chance, according to a Deutsche Bank, raising more questions about the direction of the United States. Although unemployment has remained low, data points suggest the continuing of slow growth, and the probability of a downturn over the next twelve months is about 43%. Jerome Powell, the Federal Reserve Chair, claims that the economy is "strong overall," but he and his colleagues lowered their GDP growth estimate to 1.7% and raised the outlook for core inflation to 2.8%. The combination of higher inflation and growth began to decline, raising concerns regarding stagflation. In recent weeks, markets have been nervous, and bond expert Jeffery Gundlach at DoubleLine Capital forecasts a  50% to 60% recession to occur. A recent stock market decline was driven by uncertainty over U.S. tariff policies, raising fears of a potential economic slowdown or stagflation. Barclays expects only modest economic slowing, projecting just 0.7% growth for the year. Meanwhile, UCLA’s Anderson Forecast issued its first-ever “recession watch,” citing Trump’s tariffs as a key risk. Economist Clement Bohr warned that unless tariff threats are reduced, the U.S. could face a deep and possibly stagflationary recession.

    Overall, the current state of the economy is not looking good. On one hand, low unemployment and steady consumer spending offer some reassurance. On the other hand, rising inflation, slower growth projections, and uncertainty around trade policies make both economists and investors nervous. So much so that talks about stagflation are a possible concern. The future of the economy is uncertain, and only time will tell what will happen. 

The probability of a recession is approaching 50%, Deutsche markets survey finds

Major Infrastructure Investments in the U.S. Since November 2024

Since President Donald Trump re-entered office in November 2024, the United States has experienced a surge in infrastructure investments across various sectors, including technology, manufacturing and energy. These initiatives aim to bolster economic growth, enhance energy security, and position the U.S. as a leader in emerging technologies. 

Schneider Electric's $700 Million AI Investment

- Schneider Electric has announced plans to invest over $700 million in the U.S. by 2027 to enhance energy infrastructure critical for AI advancements. This investment includes upgrading and opening facilities in states such as Tennessee, Massachusetts, Texas, Missouri, Ohio, and the Carolinas, and is expected to create over 1,000 jobs. The initiative underscores the growing demand for robust energy infrastructure to support AI technologies.

Johnson & Johnson's $55 Billion Commitment

- Johnson & Johnson announced plans to invest over $55 billion in the United States over the next four years, including the construction of four new manufacturing plants. This commitment represents a 25% increase compared to the previous four years and is expected to have an economic impact of more than $100 billion annually.

Amazon's $10 Billion Investment in Ohio Data Centers

- Amazon has committed an additional $10 billion towards expanding its data center operations in Ohio, bringing the total expected investment in the state to over $23 billion by 2030. This expansion is part of Amazon Web Services' strategy to support growing AI demands and is accompanied by significant job creation.

Sources

https://www.reuters.com/business/schneider-electric-invest-over-700-million-us-power-ai-boom-2025-03-25/?

https://apnews.com/article/3afc1b68dd0ba09242b5d56a0e2eb86d?

https://www.businessinsider.com/amazon-invests-10-billion-ohio-data-centers-energy-concerns-2024-12?

The probability of a recession is approaching 50%, Deutsche markets survey finds

    A Deutsche Bank survey was taken recently and showed there is a 50-50 chance the U.S. could enter a recession within the next year, with 43% predicting a downturn. Although reports are showing low unemployment and strong numbers, there is a concern about a recession, but Federal Reserve Chair Jerome Powell acknowledging these worries while stating that the economy is still “strong overall.” However, the GDP growth forecast was changed down to 1.7%  for the year, which is the lowest growth since 2011, and even raised the inflation forecast as well which is predicted at 2.8%, higher than the Fed's target. The mix of high inflation and slow growth has brought up the talk of stagflation.

    With all these concerns, the market outlook has become a little nervous for investors, with a bond expert stating the likelihood of a recession at 50-60%. As I mentioned before, analysts warn that the U.S. may be headed toward stagflation. While some people like Jerome Powell don't believe there is a likelihood of a severe stagnation, firms like Barclays and UCLA Anderson are forecasting a slowdown. UCLA has said they are in a "recession watch" for the first time, explaining there are concerns about President Trump's tariffs and the possibility for a recession or stagflation if the administration continues to create policies that will only hurt ourselves.

Link: https://www.cnbc.com/2025/03/24/the-probability-of-a-recession-is-approaching-50percent-deutsche-markets-survey-finds.html

Trump pledges auto, pharma tariffs in ‘near future,’ sowing more trade confusion

 President Trump announced Monday, soon he will be announcing tariffs targeting autos and pharmacuticals as well as other sectors. This follows their recent announcement of steel and aluminum tariffs. Trump claims to announce pharmaceuticals because he says "we have to have pharmaceuticals". Trump also announced Monday that there are plans to add lumber and semiconductor industries to his list saying tariffs would come down the road. Trump also states at the same event that the reciprocal tariffs "may give a lot of countries breaks".  Trump states that these tariffs are going to be imposed on April second but many people are skeptical. With all of the different tariffs President Trump has proposed it is hard for consumers to have any certainty, as well as investors in the market there is a lot of uncertainty. As we have learned in class if these tariffs are announced we will begin to see almost immediate reaction from the economy, resulting potentially higher prices for consumers in auto and pharmaceuticals. 

https://www.cnbc.com/2025/03/24/trump-tariffs-autos-pharmaceuticals-sectoral-reciprocal.html

  

Trying to Keep Hospitals from Inflating America's Healthcare Bill

    The cost of healthcare in America is a major worry, and most of the costs fall onto hospitals. They account for almost one-third of overall healthcare spending, taking $1.5 trillion in fees in 2023—double that of medications. Hospital costs have grown more than 250% since the year 2000, nearly twice the pace of inflation. This is in great part due to the fee-for-service system, by which hospitals bill for every test and procedure, regardless of necessity. Despite efforts to shift to value-based care, payments are still largely made under this outdated system, keeping costs high.

    Consolidation of hospitals has also contributed to the problem. Hospital chains have grown by merging with other institutions, giving them more leeway to set higher prices without necessarily improving the care provided.  Private equity firms have also entered the hospital industry, sometimes making money-focused decisions that prioritize profit over patient well-being. Although they do not own many hospitals, studies have found their presence lowers the quality of care. Medicare and private insurers pay extra for hospital services compared to independent doctors' offices.

    Attempts to reform the system persist, such as new legislation requiring hospitals to be more transparent with prices. Some legislators are also advocating "site-neutrality" policies, in which Medicare would pay the same regardless of where a service is delivered. There are even some investors and technology companies that are looking at how to disrupt the sector and lower costs. But for the time being, the U.S. hospital system is still a major contributor to high healthcare costs, with many patients facing costly and challenging medical bills. 

How hospitals inflate America’s giant health-care bill. (2025, March 20). Business | For all they care. Retrieved from [URL] https://www.economist.com/business/2025/03/20/how-hospitals-inflate-americas-giant-health-care-bill

President Trump Announces Tariffs on Countries that Buy Oil and Gas from Venezuela

 President Trump announced on Monday that any countries that buy oil and gas from Venezuela will have a 25% tariff imposed on them. The tariffs will cover any trade the country has with the US and will take effect on April 2^nd. Last year, Venezuela exported around 660,000 barrels per day, with China being the main destination for the crude exports. The US was the second largest destination for Venezuelan crude exports. Analysts see the announcement as another action from the Trump administration putting pressure on China as well as an effort to increase pressure on the Venezuelan government lead by President Maduro. In the announcement on Monday, President Trump accused Venezuela of sending gang members to the US.

https://www.cnbc.com/2025/03/24/trump-says-any-country-that-purchases-oil-from-venezuela-will-have-to-pay-25percent-tariff-on-trade-with-us.html

Tax revenue collected by the IRS set to plummet, report says

 The IRS and Treasury Department anticipate a more than 10% drop in tax revenue by April 15, potentially exceeding $500 billion, due to shifting taxpayer behavior and cuts at the IRS under President Donald Trump, according to the Washington Post. The decline is attributed to more individuals and businesses avoiding or failing to file taxes. Thousands of IRS jobs are expected to be cut as part of Elon Musk’s Department of Government Efficiency spending reductions, which experts warn could hinder tax enforcement during the busy season. The IRS has also reported increased online chatter about tax avoidance strategies. However, the Treasury Department dismissed the report as “sensational and baseless.”

link-https://www.cnbc.com/2025/03/24/tax-revenue-collected-by-the-irs-set-to-plummet-report-says.html

CNBC Daily Open: Tariff flexibility sounds good, but also signals uncertainty

  https://www.cnbc.com/2025/03/24/cnbc-daily-open-tariff-flexibility-could-also-mean-uncertainty.html

The article points out how the unpredictable yet flexible tariff policies of the Trump administration are keeping businesses and investors in the dark. Although the administration is eager to safeguard local industries, the uncertain direction has caused issues for most companies to plan their strategy.This unpredictability is making companies cautious, which is leading them to hold back on investments and expansion plans. Uncertainty can slow down economic growth as companies hold back from taking risks if they are uncertain about the terms of trade in the future. The government needs to make the guidelines clearer and more consistent to create a stable economic situation that would boost investment and confidence in the business community.

Stock Market Slips as Tariff Concerns Weigh on Economic Outlook

On March 21, 2025, U.S. financial markets faced a notable decline as investors reacted to growing concerns over President Trump's latest round of tariffs. The Dow Jones Industrial Average fell over 400 points, while the S&P 500 and Nasdaq recorded losses. These market moves follow recent announcements of increased tariffs from Canada, China, and Mexico, key trade partners for the U.S.

Investor Uncertainty on the Rise

The tariffs have created unease among investors, many fearing higher imports could hurt corporate points and spark inflation. Companies that rely on global support chains are especially vulnerable, with sectors like manufacturing, automotive, and consumer goods already feeling the strain.

Economic Indicators Sending Mixed Signals

This market dip coincides with a broader shift in economic sentiment. The Federal Reserve held interest rates steady in March amid slower GDP growth and elevated inflation. With tariffs potentially amplifying cost pressures, the Fed may be forced to maintain higher rates longer than expected.

Looking Ahead: Trade Policy and Market Stability

Economists warn that continued tariff escalation could damage global trade relationships and affect consumer prices. If companies pass costs onto consumers, spending could slow, adding more pressure to an economy already adjusting to a post-pandemic environment. The situation highlights how closely tied U.S. trade policy is to financial markets and overall economic health. As investors watch for the administration's next move, all eyes remain on how the Fed, businesses, and consumers will respond in the months ahead.

Article: Investors are taking cover as economic concerns grow By Alain Sherter

Source: https://www.cbsnews.com/news/today-stock-market-down-news-trump-tariffs-3-21-2025/

Tariffs and Rising Prices in 2025

Tariffs have remained at the forefront of driving rising consumer prices in 2025 with Federal Reserve Chair Jerome Powell calling them "simply inflationary." Levies on neighbors and major trade partners Mexico and Canada, along with China are making imported items more expensive for U.S. businesses which ultimately end up hurting the consumers. The Federal Reserve's elevated inflation forecasts reflect growing unease, while some economists are suggesting that these prices hikes might be short lived. As of now, economic uncertainty and tensions regarding trade policy continue to weigh on markets.

The potential ripple effects of tariffs ultimately creates uneasiness for both businesses and households alike. As seen by costs increasing for crucial items such as steel and aluminum, everything from cars to home building expenses are increasing. Although the administration sees these measures as a broader part of their strategy, many are questioning whether the higher prices could undermine the economic gains that might emerge. It will be interesting to continue to watch how the administration uses tariffs and if we as consumers can expect to see a decrease in prices this year at all.

Link: https://www.cnbc.com/2025/03/20/tariffs-are-simply-inflationary-economist-says-heres-why.html

Are we Heading into a Recession?

    With trade tensions rising and traders betting on a cooling market, some

speculate that we could be heading into a recession. One factor in some of these

warnings is the decline in consumer confidence, which according to the

University of Michigan’s consumer survey has declined by 10.5%. This can impact

retail sales, as consumers are less willing to spend money if they are unsure of what is to

come. Although consumer confidence is down the CPI numbers have not shown any signs of dipping. Another factor is inflation in general is at 2.7% which is high compared to the 2.5% forecasted by the FED.  The warning signs for a recession are not cohesive across the board, with Job openings and household spending holding steady, showing that a recession is not necessarily shortly for certain. 

Are we heading into a recession? Here’s what the data shows

Amid Trump policy changes, the Fed takes the back seat