On September 7, 2025, U.S. Treasury Secretary Scott Bessent appeared on NBC’s Meet the Press and warned that intensified economic measures—including more sanctions and imposing secondary tariffs on nations still importing Russian oil—if executed in coordination between the U.S. and the European Union, could cause the Russian economy to implode and force President Vladimir Putin to enter peace talks with Ukraine. Bessent underscored that the Trump administration is ready to escalate pressure, but emphasized that success hinges on unified transatlantic cooperation, pointing out that they are now in a critical race between “how long the Ukrainian military can hold up versus how long the Russian economy can hold up.” He also noted that while new sanctions on Russia and China have been withheld, tariffs on exports from India—another major Russian oil buyer—have been increased.
Wednesday, September 10, 2025
Monday, September 8, 2025
Auto Industry Takes $12 Billion Hit From Trade War
President Trump’s tariffs have dramatically affected the auto industry, setbacks compared to the covid pandemic and predicted to worsen. We are seeing short-term effects currently, but car makers will have to make costly supply chain adjustments to compensate for the complex ever-changing policy from our administration, which will certainly have long-term effects. Automarkers are now under pressure to localize production in the U.S. While this may reduce tariff exposure, the cost to re-locate production plants will run over billions of dollars for companies such as GM, Toyota, and Honda. These costs can be attributed to shifting production capacity, retooling factories, and localizing supply chains, even as they face declining profits. Capital that was initially allocated to growth and expansion is being re-directed to off-set policy costs and decisions.
Automakers have reported nearly $12 billion in losses so far, with Toyota alone losing $3 billion and expecting profits to drop by 44%. GM estimates its costs at $4 to 5 billion, and overall, the top global automakers are projected to see profits fall by about 25% this year, the lowest since the pandemic. These numbers show just how much tariffs are straining the industry’s bottom line.
At the same time, tariffs are speeding up a change that was already happening in the car industry. Instead of making one type of car for the whole world, companies are starting to focus more on specific demands of each geographical location. For example, electric cars are becoming very popular in China and Europe, while trucks are still the big sellers in the U.S. This means carmakers have to spend more money to build different cars in different places, which makes things less efficient. But on the flip side, some spectators think that it could help the U.S. economy by creating more jobs and keeping production closer to home.
Worker confidence in finding a new job hits record low in New York Fed survey
The big takeaway from this article is that people's confidence in the job market is at a historical low. A survey from the New York Fed found that people feel there's only a 44.9% chance of finding a new job if they were to lose their current one. This is the lowest that number has been since the survey started back in 2013! It's a huge change from a few years ago during what was called the "Great Resignation," when people were quitting their jobs at a record pace. Back then, as many as 4.5 million workers a month were quitting, but that number has now dropped to 3.2 million in July, a decrease of over 5% from 2024.
People's expectations that the unemployment rate will be higher a year from now went up to 39.1%, which is a 1.7 percentage point increase from July. The job data from August indicated that only 22,000 new jobs were created, which is way below the expected 75,000. They even revised the numbers for June, showing a loss of 13,000 jobs, which was the first monthly drop since December 2020. The overall unemployment rate went up to 4.3%, and a broader measure of unemployment that includes discouraged workers climbed to 8.1%. All of this points to a slowdown in hiring, and it has caused workers to "job-hug" their current positions. What do you think this means for the Federal Reserve and interest rates?
source :
The UK borrowing costs hits their highest level and adds to pressure to Reeves
The UK government's long-term borrowing costs has reached their highest level since 1998. Interest rates on these 30-year government bonds increased to 5.72%, which is making it more expensive for the government to borrow money. There are expectations that Chancellor Rachel Reeves will increase taxes in the Budget later this year.
There seems to be a short-term UK government debt as of Tuesday. The UK Debt Management Office had sold a record £14bn of 10-year bonds. The pound also fell more than 1% against the dollar and sterling fell against the dollar to $1.3388, which is the lowest level against the US currency since 7 August. While in the US, 30-year Treasury bond yields rose to their highest.
The article states that geopolitical tensions, US President Donald Trump's trade policies and the upcoming confidence vote in the French government had led to borrowing costs for governments around the globe to go up.
I do not know much about it but it would be interesting to see how the vote in the French government pans out because I also saw in another article that the French government is basically collapsing.
Chancellor Rachel Reeves promises not to raise taxes such as income tax, VAT or national insurance on "working people," but raises the question of what taxes Reeves could raise in the autumn Budget?
There is a couple options:
1.) Extending the freeze on income tax thresholds, which is due to end in 2028
-Referred to as a "stealth tax"
-Over time as salaries rise, more people are dragged into paying higher rates
2.) Reforming property taxes
I am interested in seeing what Chancellor Rachel Reeves decides to do.
Edser, T. E. &. N. (2025, September 2). UK borrowing costs hit 27-year high adding to pressure on Reeves. https://www.bbc.com/news/articles/cy989njnq2wo
US Tariffs Show China's Increasing Reliance on External Markets
According to customs data, China's exports have increased 4.4% in August making this the lowest growth since February. This is missing the Reuters estimate of 5.0% by a large margin. Imports grew a shy 1.3% last month from a year ago, also missing the Reuters estimate of 3.0% by a large margin. Exports to the U.S. have dropped a vast 33% making it the largest drop in 6 months, similarly, imports from the U.S. have dropped 16% showing the lingering effects of the tariffs. Given these figures the U.S. still remains the largest trading partner with China, even with the recent lock in of 55% tariff on Chinese imports and 30% on Chinese duties on U.S. goods.
These figures show the relationship between the two countries, highlighting China's large reliance on the U.S. as an importer of Chinese goods and inversely, the U.S. taking a large portion of China's exports, reaching values of $283 billion as of August. Considering all of the implications of the U.S. China trade dispute, China is still operating at a trade surplus of approximately $102 billion for August. This figure shows promise given it was forecasted at $99.2 billion. However, this is also a steep drop-off from June highs of $114 billion. This surplus can be attributed to China's efforts to rely on close foreign markets such as the European Union bloc, the Association of Southeast Asia, and African Markets. However, this increase in exporting to other foreign markets have yet to offset the steep drop-off from exports to the U.S. This push to go abroad has been ongoing for China has had relatively slow domestic markets that have been nudged by these U.S. tariffs. The policymakers of Beijing try to steer clear of sweeping stimuli such as excessive price-cutting shown in their "anti-involution" policies and have tried to rely on targeted credit and monetary measures. I am interested to see if China begins to rely a lot less on the U.S long term or if these trade disputes will reach an end soon and we will see a surge of Chinese exports to the U.S.
https://www.cnbc.com/2025/09/08/china-exports-growth-in-august-drops-missing-expectations-.html
Job openings data falls to levels rarely seen since pandemic
The job openings in the U.S. has dropped to levels that we have not seen since covid-19 calling for fears in the labor market. The job openings and labor turnover showed reports of around 7.18 million listings in July, which has not been less than 7.2 million since the end of 2020. Economists expected it to be around 7.4 million which is a notable amount different from what it can to be. They now see this decline as a big turning point, and is yet another data point underscoring how the job market is frozen making it difficult for anyone to get a job. Weekly jobless claims data will give us a better grasp on how bad this has already been affected everyone.
While people could view this as just a temporary fluctuation, I feel like this could be an early warning of a much deeper challenge with the future job market. Less openings will cause workers to face tougher competition and a lot less leverage when it would come to getting better pay or benefits. Whether this trend steady's go down or up, it'll be very interesting to see the affect it has on the job marker. I believe this will have a huge affect on college graduates with looking for jobs cause they'll have to compete with much more experienced workers.
https://www.cnbc.com/2025/09/03/job-opening-data-falls-to-levels-rarely-seen-since-pandemic.html
Tariffs and Rising Rates Put the Brakes on Job Creation
In the U.S, employers had 7.2 million job openings in July. Comparatively, that is down from the 7.4 million reported in June and also is the lowest since September of 2024. Rising interest rates and tariffs have seem to lessen the creation of jobs in the U.S. A report from the Job Openings and Labor Turnover Survey showed the hiring of jobs has been slow and difficult all summer; partially due to the fact of Trump's new interest rates, import and export prices, etc. Regardless of the job opening slowdown, most business in the U.S. did a great job of evading a mass firings.
What could come next is the FED is now trying find a way to boost the job market by taking interest rates in September and cutting them. Key interest rates from the FED have kept borrowing costs somewhat high on all sorts of loans which has cooled down the creation of jobs and the economy. I am interested to see where this goes in the coming weeks and maybe years, obvisouly I am hoping to leave college and have job opportunities readily available. It is not encouraging to hear that jobs may not be the easiest get in this country in the current moment. Is it an exaggeration? Maybe, but I am interested to see how this all pans out with job openings, the FED, and tariffs.
https://finance.yahoo.com/news/labor-market-lost-steam-tariffs-151626842.html
Sunday, September 7, 2025
Did Trump Overstep Powers with Tariffs?
The Supreme Court of the United States is currently viewing an appeal that was submitted by the Trump administration on September 3. The Trump administration reasoned that America would become a "poor nation" without the tariffs. It has been reported by the Department of Homeland Security reported that the reciprocal tariffs that first started going into place in April 2025 have totaled to $81.5 billion.
Treasury Secretary, Scott Bessent, said on "Meet the Press" that if the Supreme Court rules that Trump is overstepping his presidential powers in these tariffs that "about half the tariffs" would be refunded back to the people. Bessent is confident that that the Trump administration will win at the Supreme Court. Bessent also made clear that there are also many other options and "other legal authorities" to continue to implement tariffs even if Trump does not win this case.
The impact of these tariffs are starting to reveal themselves. Job openings are currently fewer than unemployed people and the unemployment rate is the highest it has been in the past four years at 4.3%. The goods sector has also taken a rough hit. Economist Joe Brusuelas said that Goods businesses have posted four straight months of declines since May. Earlier this year, major companies like Nike, Walmart and Hasbro warned that these tariffs would lead to price hikes.
It will be interesting to see what the SCOTUS rules and whether there will be refunds on Trump's extremely controversial tariffs.
Link to Article: https://www.cnn.com/2025/09/07/business/tariff-rebate-supreme-court-bessent
As Trump berates Goldman, other economists agree that higher tariff inflation is coming
Trump argued with Goldman Sachs after they said his tariffs are making prices go up and creating inflation. But the latest numbers from the government show prices are rising anyway. In July, inflation went over 3% for the first time in months. Goldman says this is happening because companies are starting to raise prices to cover the higher tariff costs. That means the things we buy every day, like clothes, food, or electronics, are starting to cost more and this could continue if tariffs stay in place.
Other big banks like UBS, JPMorgan, and Oxford Economics, also say the same thing. They believe tariffs are already pushing up prices and could keep rising through the rest of the year. Some think inflation could reach almost 4% by the end of 2025, which is much higher than the 2.4% it might have been without tariffs. This means bills could keep getting more expensive and leave people with less money to spend on other things. The Federal Reserve is still expected to cut interest rates later this year because the job market is weakening, and some believe inflation from tariffs won’t last forever. Still higher prices could slow the economy and hurt consumers.
Job openings data falls to levels rarely seen since pandemic
U.S. job openings have fallen to their lowest levels since the pandemic, signaling a significant cooling in the labor market. According to the latest JOLTS data, there were about 7.18 million openings in July 2025, down from 7.36 million in June and well below the post-pandemic peak of 12.1 million in 2022. This decline has been especially sharp in healthcare, social assistance, and retail sectors that normally drive job growth.
The slowdown reflects cautious hiring rather than mass layoffs, as companies hold off on expanding economic uncertainty, tariffs, and monetary policy shifts. While this offers some relief to the Federal Reserve in its effort to cool inflation, it poses challenges for job seekers who now face a tighter market. Employers may benefit from a larger pool of applicants, but the broader trend points to a softer labor market and the possibility of interest rate cuts if conditions weaken further.
Job openings data falls to levels rarely seen since pandemic
Thanks to the AI data center boom, it’s a good time to be an electrician
Despite the concern of artificial intelligence advancement replacing jobs, the construction of AI data centers is boosting the demand for electricians and other skilled laborers. 45% to 75% of the build-out of data centers is electrical and installation of new equipment requires electricians as well. Additionally, AI data centers require around the clock electrical work. Due to the increased demand for data centers to support the prolific research and development of AI, reports suggest that 81,000 electrician jobs will need to be filled annually over the next decade.
Here, we see the positive effects the AI advancement age is having on the US economy. The surging demand and race to capitalize on AI is boosting other sectors of the labor market. Electricians, especially, will see not only a rise in employment and salary opportunities but can be optimistic of the sustained need for their profession as much of the opportunities come from regular maintenance. Another positive signaling effect of this labor growth is major companies like Google and Microsoft are donating millions of dollars to unions and electrician training programs.
https://finance.yahoo.com/news/thanks-to-the-ai-data-center-boom-its-a-good-time-to-be-an-electrician-133026522.html
Labor Market Cools as Job Openings Hit Rare Lows Post-Pandemic
On Wednesday, September 3rd, the Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS), raising concern amongst economists about the strength of the U.S. labor market. The report showed 7.18 million job openings in July, one the second reading below the 7.2 million mark since the end of 2020 and the COVID-19 era.
This latest released marked the lowest level of job openings since September 2024, when listings stood just above 7.1 million. Besides the temporary dip in 2024, job openings have not fallen to this level since the early months of the pandemic when the economy was largely impacted by widespread shutdowns. Economists polled by Dow Jones expected around 7.r million openings, making this shortfall even more notable and suggesting growing weakness within the labor markets. Heather Long, chief economist at Navy Federal Credit Union, described the situation bluntly: "This is yet another data point underscoring how this job market is frozen and it's difficult for anyone to get a job right now."
Going beyond the economic implications, the report carries significant political weight. The recent firing of former BLS Commissioner Erika McEntarfer over concerns about inaccurate job reporting has placed the agency under fire. With job openings now at their lowest point in several years, the current administration will be forced to respond. The question is how President Trump will address these numbers, and what policies he will introduce in hopes of stabilizing the labor market. This could be a turning point or a breaking point for this administration as they implement policies to combat the weaking labor market.
Job openings data falls to levels rarely seen since pandemic
Bessent Predicts Strong Economic Growth by the End of the Year
Treasury Secretary Scott Bessent expressed optimism for the U.S. economy despite a period of weak job growth and rising unemployment. He predicted that the economy would accelerate by the fourth quarter, citing the administration’s pro-business policies, including the One Big Beautiful Bill Act, as key drivers for future growth. Bessent emphasized that businesses are planning to increase capital expenditures and hire more workers, suggesting that these investments will strengthen sectors such as construction and manufacturing.
The economic context presents significant challenges. Job growth has been slow, with only 22,000 positions added in August and an unemployment rate of 4.3 percent. Manufacturing companies like John Deere have laid off employees due to the impact of tariffs, while consumers are facing rising prices. Democrats have criticized the administration for its handling of the economy, while some Republicans have focused on Federal Reserve policies as a source of concern. Bessent dismissed the idea that tariffs are harming the economy, framing them instead as beneficial for certain businesses, but overall data suggest that achieving these optimistic projections may require overcoming persistent economic obstacles.
https://www.politico.com/news/2025/09/07/bessent-predicts-substantial-accelaration-economy-00549806
Payrolls Rose 22,000, Sign of Hiring Slowdown
With the end of August came the release of the Nonfarm payroll statistics. The release showed an increase of only 22,000 in the payroll, indicating that the downward trend in job creation is continuing. The previous couple of months have demonstrated weak job creation growth, with July showing a decline of 13,000 jobs. This is a concern for the government as it examines the market, as it indicates that the labor market is weakening. Many people believe that these indices will be a major driver in the Fed's decision to cut rates in its next release on September 17th. Overall, the data surveys indicate that the healthcare sector is leading the way in job creation in the job market. The Bureau of Labor Statistics will release its revised statistics this Tuesday after conducting further surveys, but there is little hope of seeing an increase in the numbers.
Although the job creation statistics do not indicate a strong job market, the unemployment statistics are showing some signs of improvement. The overall unemployment rates did see an increase; however, this incline is likely a result of growth in the labor force. With the latest release of labor statistics, the labor force grew by 436,000. Along with the increase in the labor force, there was growth in the U.S. wage values. The hourly wage has seen a rise, although it remains slightly behind the projected values for the year's growth goals. It is also a good sign that the stock markets were not hindered by the job creation statistics upon their release by the Bureau of Labor Statistics. The stock market opened high, indicating that the market did not have extreme concerns about the released data. Overall, the data being released continues to support the belief that the Fed will cut rates and indicates that some change is needed to support the weakening job market.
https://www.cnbc.com/2025/09/05/jobs-report-august-2025.html
Saturday, September 6, 2025
Former Federal Reserve Governor, Adriana Kugler resigns abruptly
Former Federal Reserve Governor, Adriana Kugler abruptly resigned from the Board on August 1st 2025 even though her term was not set to expire till January 2026.
Kugler has refused to give a reason for stepping down and has also decided not to comment further to media which has fueled speculation and confusion. The Federal Reserve commented that Kugler would be returning to Georgetown University as a professor in the fall, but her faculty page doesn't show her teaching any courses, and hasn't been updated since she became governor of the Federal Reserve Board, and Georgetown University has also refused to put out a statement about Kugler's status with the university.
There's speculation on whether she might have been pressured to step down, especially because other Fed board members are under political scrutiny. NBC notes that "inconsistent real estate records have become a type of ammunition that the Trump administration has used to target its political enemies, often citing the records to publicly accuse people of having committed 'fraud'." These allegations have been extended to Lisa Cook, the Former Fed governor who had a campaign launched against her for committing 'mortgage fraud', and other political figures like New York Attorney General Letitia James and Democratic California Sen. Adam Schiff (who are two of Trump's legal antagonists) who have also been accused of mortgage irregularities. While real estate records related to Kugler also show discrepancies regarding her primary residence, nothing shady seems to be going on there.
Kugler's resignation provided Donald Trump with the opportunity to choose a successor to fill her seat till the end of her term, and he chose Stephen Miran, the White House advisor. With this addition to the board, Trump now has nominated three of the seven members on the board, which gets him closer to his goal of 'dominating' the central bank.
Seating Miran on the Fed Board is a victory for Trump who has been battling for months with the Federal Reserve Chairman Jerome Powell for control and to drop the interest rates. The Trump administration have accused Powell of deliberately holding back U.S. economic growth, and Trump says he should have lowered interest rates a long time ago.
Friday, September 5, 2025
Trump finalized Japan trade deal with 15% tariffs as Ishiba faces discontent from within party
On September 4, 2025, U.S. President Donald Trump signed an executive order implementing a new trade deal with Japan that lowers tariffs on Japanese automobiles from 27.5% to 15%, effective retroactively from August 7, and prevents double taxation on goods already above that threshold, while exempting commercial aircraft. In return, Japan pledged $550 billion in U.S. investments spanning semiconductors, pharmaceuticals, energy, metals, and shipbuilding, alongside increased purchases of American agricultural and defense products, including an order of 100 Boeing planes. Japanese Prime Minister Shigeru Ishiba praised the agreement as a diplomatic breakthrough that clears uncertainty for key industries and invited Trump to visit Japan, stressing a shift from tariffs to investment-based relations. Yet Ishiba’s leadership is under pressure at home, as internal dissatisfaction within the Liberal Democratic Party and recent electoral setbacks could trigger a party leadership challenge as early as Monday, leaving his political future uncertain.
https://www.cnbc.com/2025/09/05/trum-japan-trade-deal-tariffs-ishiba-ldp-party.html
Thursday, September 4, 2025
Retirees and the Fed
At the Federal Reserve’s annual meeting in Jackson Hole last week, Chair Jerome Powell suggested that interest rate cuts may be coming soon. This announcement made the stock market jump, but it was worrying news for retirees. As Brett Arends explained in MarketWatch (Aug. 22, 2025), retirees came away worse off because of three things: the chance of lower interest rates, higher inflation caused by tariffs, and signs that the Federal Reserve may be giving in to political pressure.
For retirees who depend on savings accounts, CDs, and bonds, lower interest rates mean less money earned on their investments. That leaves them with less income to cover everyday expenses. At the same time, inflation is still higher than the Fed’s two percent goal. Prices have been rising by about 2.7 percent overall and 2.9 percent when food and energy are excluded. This makes life more expensive, which is especially hard for people on fixed incomes.
Another major concern is the independence of the Federal Reserve. Powell avoided defending his colleagues and appeared open to rate cuts even though there was little economic reason to promise them. This raised fears that the Fed may be bending to political pressure. History shows why this matters. In the 1960s and 1970s, when the Fed followed politics too closely, inflation got out of control. It was only when an independent Fed, under Paul Volcker in the 1980s, took tough steps that inflation came back down.
In the end, Powell’s remarks gave retirees little to feel good about. They now face lower income from their savings while also dealing with rising prices. The stock market may like the idea of lower interest rates, but for people living on fixed incomes, it creates real financial strain.
Monday, September 1, 2025
Tourism Sector on Track for Record-Breaking Economic Impact
Kenya’s tourism industry is poised for a historic year in 2025, with the World Travel & Tourism Council (WTTC) projecting a contribution of KSh 1.2 trillion to the economy. This figure is not only 24% higher than pre-pandemic levels but also represents more than 7% of Kenya’s GDP, making tourism a pillar of national growth alongside agriculture and manufacturing. The sector’s impact is wide-reaching, supporting an estimated 1.7 million jobs. These roles stretch far beyond hotels and safari guides, extending into agriculture, transportation, and handicrafts. Tourism’s employment multiplier effect is crucial in a country where job creation remains one of the government’s top priorities.
Spending patterns underscore the sector’s dual strength. Domestic tourists are expected to spend nearly KSh 560 billion, reflecting the growth of Kenya’s middle class and a renewed interest in local destinations. Meanwhile, international visitor spending is projected at over KSh 300 billion, up 31% from 2019, fueled by relaxed visa rules and aggressive global marketing. Tourism Minister Rebecca Miano has set ambitious revenue targets of KSh 650 billion (approx. US$5 billion) for 2025, up sharply from KSh 452 billion in 2024. Much of this growth will come from diversification into coastal, cultural, and conference tourism, reducing reliance on the traditional safari product.
Sunday, August 31, 2025
Social media influence over Gen Z investment rates
Retail investing among Gen Z has surged dramatically over the past decade, with 25-year-old participation jumping from just 6% in 2015 to 37% in 2024, according to JPMorgan. This spike was especially pronounced during the pandemic, when social media exposure and accessible mobile trading platforms led many young people, especially men, into the markets. Male participation in investment rose from 20% to 30%, widening the gender gap, while female participation remained flat at about 35% of retail investors overall. JPMorgan researchers emphasized that while the pandemic may have created a temporary cohort effect, the new baseline for Gen Z investment participation is likely to remain well above pre-2020 levels.
The study also highlighted positive shifts in income-based access to investing. Individuals from below-median income groups represented about 20% of investors in 2014, but their share rose to 31% by May 2025, the highest outside of periods affected by direct stimulus payments. Despite these improvements, significant gaps persist, both in income and gender. The authors talked about the need for targeted financial education, noting that new investors are increasingly vulnerable to risks like tax surprises during bull markets and emotional reactions to losses during downturns. As more first-time investors enter the financial system, JPMorgan suggests financial advisors may need to evolve their roles to support these shifting dynamics.
Thursday, August 28, 2025
French Risk Gauge Hits Seven-Month High as Political Fears Grow
For the first time in more than ten years, the yield differential between French and German 10-year government bonds has increased to 80 basis points. As the government struggles to pass a €44 billion austerity package amid parliamentary turmoil, the move shows growing investor apprehension about France's political risks and economic situation. French bonds are being sold off, which is raising yields in comparison to Germany's, even if German bunds continue to be the Eurozone's standard safe haven. Analysts caution that if rating agencies downgrade France or if domestic political tensions increase, the difference may continue or perhaps worsen. The French-German yield spread's dramatic increase reflects differing opinions on the Eurozone's political stability and fiscal credibility. While France's difficulties raise questions about the sustainability of its debt and the possible transfer of political risk into financial markets, Germany's tenacity highlights its position as the fulcrum of investor confidence. By eroding fiscal unity and raising borrowing costs for weaker nations, this difference might erode Eurozone cohesiveness if left unchecked. While authorities confront the pressing task of reestablishing market confidence in France's fiscal trajectory, investors interpret the trend as a shift toward German assets as a haven.
Will AI Spending Keep Propping Up the Economy?
Monday, August 25, 2025
German Economy Shrunk by 0.3% in Second Quarter
Germany's economy has shrunk by 0.3%, which is significantly worse than initially reported. To find this data, they compared their results with the previous 3 month period. The Federal Statistical Office said that the GDP contracted by 0.1% in April to June, and found this data by comparing it with the 1st quarter for Europe's biggest economy (2025).
The data also showed that the manufacturing and construction industry had also worsen, and the household spending was revised down in the quarter. These results were shown after a 0.3% growth (2025).
Since the German economy has been shrinking for the past two year, it's been Chancellor Friedrich Merz's top priority since taking office and has launched a program to encourage investing. He plans to set up a $582 billion-euro fund to pour money back into Germany's infrastructures over the next 12 years. Companies have pledged to invest at least 631 billion-euros in Germany over the next three years (2025).
Economist Carsten Brzeski stated that the surge in economic activity is the result from the U.S. front-loading of German exports in the first quarter, while the economy experienced a reversal of this front-loading effect. The U.S. tariffs took effect second quarter and this was the first full-blown impact of the tariffs (2025).
I need to further my research on the tariffs that are being placed, but it seems like the U.S. is doing a lot of harm on other countries economies. I think the U.S. should become more aware of how these policies are effecting other countries as well as how they are effecting the U.S.
I am also curious about how many companies are contributing to the 631 billion-euro investment in the next three years. Will small businesses be apart of this later on?
German Economy Shrank by 0.3% in Second Quarter in Worse Showing than Initially Thought, AP News. (2025, August 22). AP News. https://apnews.com/article/germany-economy-gdp-shrank-second-quarter-ed5a0ca6732d3cf92828e045144defc2
Tuesday, May 6, 2025
Trumps tariff plan on the movie industry
President Trump’s plan to implement a 100% tariff on foreign made movies might seem like it’s helping Hollywood, but it could actually mess with the economy and global film industry. The idea is to bring more production back to the U.S., but in reality, it risks damaging long-standing international partnerships and could raise costs for both studios and moviegoers. Smaller studios that rely on foreign collaboration might take a big hit and viewers could end up with fewer movie choices. There’s also the chance that other countries could hit back with their own tariffs, which would make things even worse. Even people in the industry are saying this move could do more harm than good in the long run.
https://www.cnn.com/2025/05/05/media/movie-tariffs-trump-hollywood
https://www.cnn.com/2025/05/06/business/trump-movie-tariff-threat-nightcap?iid=cnn_buildContentRecirc_end_recirc
Wobbling economy will push the Fed to cut interest rates later this year, CNBC survey finds
A CNBC survey sent out to 31 fund managers, analysts, and economists, finds that there is still an expectation among experts that interest rates will get cut before the end of the year. Something interesting to note is that from the March to the April survey, there was a 21% jump (44% to 65%) in those who believe that an interest rate cut is happening. This prediction seems to come from the fact that stagflation is a revenant continuously coming back to haunt the Federal Chair Jerome Powell. It seems that if it comes down to choosing between continued inflation and unemployment rates, experts think that the Fed will favor the unemployment rates. Another interesting wrinkle in this dilemma is that some are of the opinion that inflation could become unanchored after a rate cut. Richard Bernstein, of Richard Bernstein Advisors, stated that cutting rates would mean the Fed is “giving up on the 2% inflation target, perhaps permanently.” Finally, lasting effects of the current administration's actions are certainly feared, as 83% of respondents believe that the U.S.'s brand has been damaged. Something like that will not be the easiest to fix on an international stage.
https://www.cnbc.com/2025/05/06/wobbling-economy-will-push-the-fed-to-cut-interest-rates-later-this-year-cnbc-survey-finds.html
Sunday, May 4, 2025
April US payrolls growth slows before full tariff impact felt
This article breaks down how job growth in April had slowed down. There were 177,000 less jobs added than in March but it was still better than expected. The unemployment rate stayed at 4.2%, so the job market’s holding steady for now. But the real concern is what’s supposed to be coming next. With Trump’s proposed tariffs still in place a lot of businesses are going to be forced to have to less hiring and less investment across the board. Right now though things don’t look too bad but you can definitely feel the uncertainty. The Fed isn’t changing interest rates yet, but if inflation or the job market shifts, that could change too. It feels like we’re in this calm before the storm, and how the tariff situation plays out could really tip the balance either way.
https://www.reuters.com/world/us/view-april-us-payrolls-growth-slows-before-full-tariff-impact-felt-2025-05-02/Thursday, May 1, 2025
GDP Pulls Back 1st time in 3 years
The US economy hit a surprising snag at the start of 2025, contracting for the first time in three years with a GDP decline of 0.3% in the first quarter. This drop was unexpected, especially since economists had predicted a slight decrease of only 0.2%. A significant contributor to this downturn was a staggering 41.3% surge in imports, as businesses rushed to stock up before anticipated tariffs from the Trump administration kicked in. While this abrupt shift in trade dynamics weighed heavily on GDP, some positive signs emerged in consumer demand, with domestic sales growing at a steady 3% and the core Personal Consumption Expenditures (PCE) index rising by 3.5%.
Despite the contraction, experts like Ryan Sweet from Oxford Economics remind us that this doesn’t necessarily signal a recession. Instead, it reflects the complexities of a shifting economic landscape. The increased tariffs and rising prices could pose challenges in the coming months, but the resilience of consumer spending offers a glimmer of hope. Investors reacted to the news with some concern, as stock markets dipped in response to the weaker economic indicators. As we navigate the rest of 2025, keeping an eye on these developments will be crucial for understanding how the economy adapts to these pressures
Wednesday, April 30, 2025
Foreign Aid or Strategic Investment?
Today, something pretty major happened on the global stage, Ukraine signed a new agreement with the U.S. that’s going to shape the future of both countries for the next decade. It’s being called the United States–Ukraine Reconstruction Investment Fund.
Here’s the basic idea: in exchange for continued U.S. support in Ukraine’s war with Russia, the U.S. now gets access to a long list of rare and valuable materials from Ukraine, including titanium, lithium, uranium, and more. These are crucial for everything from aircraft to electric vehicles to nuclear power. The deal comes as part of a broader effort by the Trump administration to frame future U.S. foreign policy around economic return rather than just ideological alignment.
Ukrainian Economy Minister Yulia Svyrydenko flew to D.C. to finalize the agreement, which both countries are saying reflects an equal partnership. Both will contribute financially, and Ukraine still decides where and how the minerals are extracted. Unlike earlier drafts, this version also doesn’t conflict with Ukraine’s path to EU membership, something that's really important for Kyiv’s long-term vision.
But while this might sound like a win-win, there are a lot of complicated questions underneath the surface. For example:
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Is it fair to tie military aid and wartime support to resource access?
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Can a country in the middle of war really negotiate as an equal partner?
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Is this a smart strategy for rebuilding Ukraine, or a new kind of 21st-century imperialism?
The Trump administration is calling it a sign of “long-term peace and prosperity,” but critics are already pointing out how transactional it feels. It’s a classic example of power politics helping Ukraine, sure, but with something very tangible expected in return.
This raises big questions about how we as a country define aid versus investment, and whether national interest should always come first in foreign policy. I wonder what this means for the future of energy, war recovery, and diplomacy.
Link: https://www.foxnews.com/politics/ukraine-signs-deal-give-us-access-rare-minerals
How AI Could Shape Our Economy — For Better or Worse
Artificial intelligence (AI) is moving fast, and while it’s easy to get swept up in the excitement, experts say we should approach it with both hope and caution. If guided well, AI has the power to boost productivity, narrow income gaps, and give small businesses a leg up. But without the right policies in place, it could deepen inequality, slow economic progress, and put even more power in the hands of giant tech companies.
Productivity Growth
AI has the potential to transform how we work, helping people focus on creative and meaningful tasks instead of routine ones. Done right, it could spark new discoveries in fields like medicine and science. But if companies fail to use it well—or if legal and regulatory roadblocks slow things down—we might end up with lots of cool gadgets but little real economic progress.
Income Inequality
AI could go either way here. On one hand, it might replace many middle- and high-skill jobs, leaving workers stuck in low-paying service roles. On the other, it could help less-experienced workers perform better and close wage gaps, as seen in recent studies where AI tools boosted productivity and job satisfaction for customer service reps.
Industrial Concentration
Right now, only the biggest companies can afford to develop cutting-edge AI, raising concerns about market dominance. But the rise of open-source AI could change that, giving smaller firms access to powerful tools and helping spread innovation more widely.
The key message is that none of these outcomes are set in stone. What happens next depends on the choices we make today. Policymakers, businesses, and everyday people all have a role to play in making sure AI benefits as many people as possible. Instead of just asking whether we should speed up or slow down AI, we should be asking: how can we shape it to serve the public good?
With smart policies and forward-thinking leadership, AI can help build a future of both progress and fairness. But if left to its own devices, it may take us down a much rougher road.
https://www.imf.org/en/Publications/fandd/issues/2023/12/Macroeconomics-of-artificial-intelligence-Brynjolfsson-Unger
Trade War Drops Consumer Confidence to a New Low
Recent economic uncertainty, fueled by escalating trade tensions, has sent consumer confidence tumbling to lows not seen since the peak of the COVID-19 pandemic. As tariffs and retaliatory measures churn global markets, households are getting hit the hardest, as uncertainty hangs over spending and investment decisions.
Its knock-on impacts are clear: higher prices on commodities, disruption to supply chains, and fear of labor market volatility have made consumers wary. Unlike the pandemic-led downturn that was driven by health crises and lockdowns, this one is policy-led, driven by trade hostilities. The shift has triggered debates around the length of economic pressure and whether policymakers possess sufficient levers to stabilize markets prior to further decline in sentiments.
In spite of all of these headwinds, there continue to be a few sectors that are resilient, due to domestic demand, which is a silver lining. But without a clear trade-off, consumer confidence may keep eroding, placing broader economic recovery in the balance. At this time, both businesses and households are preparing for a bumpy ride. As we know from class, these are clear-cut signs of a potential recession. When consumers cut back on costs, it causes a ripple effect, which causes firms to do the same.
Domestic firms, less exposed to imports, are experiencing firm demand, with some turning to domestic suppliers in a bid to avoid tariffs. Nonetheless, such advances might not prove sufficient to offset the wider issue. In the absence of diplomatic breakthroughs or policy shifts to dial back trade tensions, consumer sentiment could deteriorate further, endangering a nascent upturn. For the time being, households and businesses are tightening their belts.
Tuesday, April 29, 2025
GOP’s Student Loan Overhaul: A Step Toward Reform or a Step Back for Borrowers?
GOP’s Student Loan Overhaul: A Step Toward Reform or a Step Back for Borrowers?
On April 29, 2025, House Republicans unveiled a sweeping student loan reform proposal aimed at simplifying repayment options, imposing new borrowing caps, and tightening eligibility for financial aid—all set to take effect by July 1, 2026. The legislation represents a bold effort to address the nation’s $1.74 trillion student debt crisis, but it raises critical questions about access to higher education, affordability, and long-term impact.
Key Takeaways:
- Simplified Repayment Plans:
The bill consolidates the current four income-driven repayment plans into just two: a standard fixed repayment plan and a Repayment Assistance Plan, which offers loan forgiveness after 30 years of consistent payments. While this simplification might reduce borrower confusion, it eliminates important deferment protections, like for unemployment and economic hardship, potentially leaving borrowers vulnerable during financial downturns. - Capping Borrowing Limits:
Undergraduates would be capped at $50,000 in federal loans, while graduate students could borrow up to $100,000. While this aims to limit total student debt, it could restrict access to higher education for students pursuing degrees in fields with high tuition costs, such as medicine or law. - Changes to Pell Grant Eligibility:
The proposal expands Pell Grant eligibility to short-term training programs and raises the threshold for full eligibility to 30 credit hours per semester. However, it also tightens restrictions, penalizing part-time students who do not meet the 15-credit hour requirement, potentially reducing their awards by up to $1,479. This could leave some students, especially those working or managing family responsibilities, without the full support they need. - Increased Accountability for Colleges:
The bill holds colleges financially accountable for students who default on their loans, which could encourage institutions to improve graduation rates and post-graduation outcomes. However, the proposal also rolls back consumer protection rules like the gainful-employment and 90/10 rules, potentially allowing for-profit institutions to operate with less oversight and greater risk to borrowers.
What Does This Mean for the Future?
While the GOP’s proposal aims to reduce the federal budget impact and simplify loan repayment, it could create significant barriers for some students. The cap on borrowing could particularly affect students in high-cost fields, and the reduction in Pell Grant awards for part-time students may discourage non-traditional learners from pursuing higher education. Furthermore, removing deferments could lead to additional financial strain during tough economic times.
Moving forward, policymakers should prioritize understanding how these changes will affect low-income and non-traditional students. The reform’s goal of reducing debt should be balanced with maintaining access to education for all, particularly vulnerable groups. Colleges must also be held accountable—not just financially, but in terms of ensuring their programs lead to meaningful employment outcomes.
In Conclusion:
While the GOP’s student loan overhaul seeks to simplify the system and reduce government spending, it risks doing so at the expense of students who may face higher financial barriers. The future of this proposal depends on whether the system can be adjusted to ensure equitable access, protection for borrowers, and meaningful educational outcomes.
Chinese Manufacturing Declines in April
China’s manufacturing activity has reached a two-year low, in April, as trade with the US has been impacted with the trade war between the two companies. Data shows that manufacturing activity has fallen into contractionary territory. Economists say that the tariffs have severely disrupted trade flows between the US and China. This comes as there has been little evidence of any progress being made in terms of the two countries agreeing on a trade deal. Experts believe that the Chinese government will have to increase its fiscal spending by at least 2 trillion yuan to counter the loss in GDP from the tariffs.
https://www.cnbc.com/2025/04/30/chinas-factory-activity-drops-to-a-near-two-year-low-in-april-as-trade-tariffs-bite.htmlShaky Markets and Shifting Money: How U.S. Tariffs Ripple Through the Global Economy
The stock market’s rough start under President Trump’s second term—down 7.27% on the S&P 500 in just 100 days—shows how fast policy changes can shake the global economy.
The main reason: tariffs. The new trade policies, especially the “Liberation Day” and “reciprocal” tariffs, have made investors uncertain about the future. These kinds of policies raise costs for businesses and disrupt trade, which can slow down economic growth and increase inflation. In terms of what we’ve learned, this is like a leftward shift in the short-run aggregate supply curve.
At the same time, investors are moving their money into safer options like gold, which has gone up over 25% this year. The U.S. dollar has dropped more than 8%, and international markets like Germany and Hong Kong are seeing more investment. This shows how quickly money can move across borders when confidence in the U.S. drops.
Overall, this situation connects directly to what we’ve been studying: how trade policy affects growth, how investor expectations matter, and how economic shocks in one country can spread around the world. It is a real example of the international business cycle in action.
Canada will ‘never’ yield to Trump’s threats
Mark Carney won the Canadian election in 2025. His resistance to U.S. President Donald Trump's trade threats and hostile actions toward Canada was a major factor in his victory. Many Canadians became more patriotic and supportive of Carney's plans as a result.
The economy of Canada may be significantly impacted by this election. It is anticipated that Carney will oppose US tariffs and seek to forge closer trade ties with other nations. Since he used to run Canada’s central bank, he’ll probably focus on keeping the economy stable and helping Canadian industries that are being hurt by the U.S. trade policies.
Big brands are officially worried about American shoppers
As US consumers become more uncertain, producers are starting to take notice and plan. Big companies such as PepsiCo, Kimberly-Clark, and P&G are taking action during the uncertain financial times and preparing for a decrease in sales. Not only are the companies concerned with consumer confidence, but they are also feeling the impact of the recent tariffs imposed on Chinese goods, which have only raised production prices. With these factors, production will likely slow down, causing a shift in supply of goods, as well as consumers being more cautious with their spending habits will decrease demand. Some of the first markets to see this change in consumer spending are restaurants. Restaurants such as Chipotle are seeing a decline in demand due to consumers being less willing to spend on takeout.
Monday, April 28, 2025
Continued job growth could help ward off a recession
CNBC's Jim Cramer thinks that there could be too much pessimism on Wall Street about a recession or that we are currently in a recession. He thinks that tariffs will hurt the U.S., causing higher prices, and there may also be shortages in certain products. With this statement he also said, "But recessions revolve around employment, and there are still so many more jobs than we have people to fill them". He thinks that companies aren't laying off employees because they not be able to get workers back when economic circumstances improve. It is difficult to derail an economy that is creating jobs still. He also mentioned that tariffs are a government mandated supply shock but adding that supply shocks don't always lead to recessions. Customers may begin to switch to more budget friendly alternatives, moving to companies like Costco and Walmart. This is an interesting take from Jim Cramer and differentiating from most of Wall Street. It will be interesting to see if this Friday's labor report will prove his theory truthful.
Empty shelves, trucking layoffs lead to a summer recession in Apollo’s shocking trade fight timeline
A US recession is looming in the near future due to heightened tensions with China, according to the analysis of Torsten Sløk, the chief economist with Apollo Global Management. There has also been a sharp decline in container shipments coming from China in to US ports after President Trump placed a 145% tariff on Chinese imports. Economists predict this will result in store shelves becoming empty and inflation rates surging for heavily imported goods from China, including toys, apparel, furniture, and more.
It is also expected that US labor workers, particularly in retail, logistics, and transportation, will face the ripple effect of the new tariffs. The decrease in imports has led to lower demands for freight services, meaning potential job losses. Smaller retail businesses such as independent clothing and toy stores are most susceptible due to their limited capacity to absorb added costs.
Economists are comparing this current situation with the early stages of the COVID-19 pandemic, shown by the similar supply chain disruptions and consumer shortages. Additionally, if current trade policies continue, Sløk estimates a 90% probability of a U.S. recession in 2025. This combination of reduced imports, rising inflation, and potential job losses paints a gloomy outlook for the future.
Saturday, April 26, 2025
Recession Becoming More Likely
Nobel Prize-winning economist Paul Krugman warned that President Donald Trump’s unpredictable tariff policies are making a U.S. recession seem likely. Speaking on a Goldman Sachs podcast, Krugman emphasized that it’s not the existence of tariffs themselves but the extreme uncertainty around them imposing, pausing, and changing them rapidly that is depressing business investment and consumer confidence. Markets have already seen significant shifting, with Wall Street experiencing its worst days since 2020 before briefly rebounding after Trump paused some tariffs.
Krugman’s concerns are echoed by other financial leaders like Ray Dalio of Bridgewater Associates and economist Torsten Slok, who both warned that continued tariff volatility could easily push the country into a recession or worse. Dalio even compared the current environment to the 1930s, noting the dangers of mishandled trade wars and growing global tensions, particularly with China. Despite these warnings, Trump and his allies have defended the tariffs as part of a broader strategy to strengthen American manufacturing and encourage economic self reliance.
For now, Trump has issued a 90-day pause on a range of retaliatory tariffs, and negotiations with multiple countries are ongoing. However, tariffs on China remain, and the overall business climate remains shaky. Krugman noted that while he doesn’t expect a severe recession immediately, a sharp drop in consumer spending could quickly turn the situation worse, underlining the fragile state of the economy as the uncertainty continues.
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https://www.newsweek.com/us-recession-seems-likely-nobel-winning-economist-says-2064347
Friday, April 25, 2025
IMF: Tariffs by the U.S. put Global Growth, Stability at Risk
The International Monetary Fund (IMF) has dramatically reduced its global growth projection for 2025 to 2.8%, warning that President Trump's tough tariff policy is tightening up economies around the world. According to the IMF, the U.S. will only grow 1.8% this year—a whole point less than in 2024—while inflation will reach 5% by September.
The administration's blanket 10% tariff on all imports, with additional higher rates on specific countries, is raising consumer prices, distorting supply chains, and creating uncertainty that discourages investment. Firms are unwilling to invest or hire, and global trade flows are weakening.
IMF officials have called on the U.S. to complete trade deals quickly to soothe tensions and revive economic confidence. Absent relief, the tariffs risk triggering protracted stagnation in key world markets and hurting recovery momentum worldwide.
Increased Prices, Decreased Spending
Tariffs raise import costs, fueling inflation. When prices are higher, consumers spend less, reducing demand and slowing GDP growth.
Business Uncertainty
Uncertain trade policy discourages investment and hiring. Companies delay expansion, reducing productivity and hiring growth.
Export Burdens
Retaliation against U.S. exports, especially manufacturing and agriculture, shrinks crucial economic segments.
Interest Rates and Inflation
Accelerating inflation may lead the Fed to keep interest rates high, increasing borrowing costs and further downgrading growth.
Global Ripple Effects
When America slows, the rest of the world slows along with it. Damage to supply chains, foreign markets, and investor confidence increases the possibility of recession everywhere.
Thursday, April 24, 2025
Donald Trump Hopes to Become a One-Man Deregulator
In his second term, President Donald Trump is pushing for deregulation. aiming to take apart federal regulations quickly. This effort has gained support from both Trump loyalists and traditional conservatives. They are brought together by a desire to reduce the administrative state's power. However, Trump's approach involves bypassing established conditions and procedures to speed up the dismantling of regulations, which raises concerns about the potential diminishment of checks and balances.
To achieve his goals of deregulation, Trump is using executive authority / power and appointing officials who align with his vision of less government intervention. This strategy includes replacing institution leaders with individuals who share the same goals and visions as Trump. While this approach may speed up policy changes, it also risks interfering with the stability and predictability that regulations put in place. Despite the efforts, Trump's deregulation push faces significant resistance, making this approach more difficult. Legal obstacles are likely due to the fact that the administration's methods and goals violate procedural requirements and mandates.
Tuesday, April 22, 2025
IMF Cuts US Economic Growth Forecast Over Trade Tensions, Policy Uncertainty
Since the start of the year, the U.S. has introduced a wave of new tariffs, with other countries responding. The resulting trade barriers are now at levels not seen in a century, surpassing even the infamous 1930 Smoot-Hawley tariffs, which many economists believe deepened the Great Depression. These trade disruptions are sending shockwaves through the economy, dampening investor confidence and casting doubt on future growth.
The IMF also scaled back its global outlook. It now expects worldwide growth to hit 2.8% in 2025 and 3% in 2026, both lower than its January forecast of 3.3%. In Europe, growth is expected to slow to 0.8%, while emerging markets are projected to expand by just 3.7% in 2025 and 3.9% in 2026. Some of the steepest downgrades were seen in countries most impacted by tariffs. China, for example, saw its growth forecast cut to 4% for both years, a notable drop from earlier projections.