• The major stock indices ended Friday mostly flat despite President Donald Trump claiming China had violated a trade agreement hammered out more than two weeks ago between the People’s Republic and the U.S. 

Stock markets finished the week on an even note despite President Donald Trump calling out China on social media. The S&P 500 posted a slight dip of 0.02%, the Nasdaq dropped 0.4%, and the Dow Jones was up just 0.1%. 

On Friday morning, Trump posted on Truth Social, his own social media platform, that his administration struck a “FAST DEAL” more than two weeks ago to ratchet down a trade war between the People’s Republic and the U.S. 

He was referring to an agreement hashed out between Treasury Secretary Scott Bessent and Chinese counterparts in Switzerland to institute a 90-day pause on U.S. tariffs on Chinese exports and reciprocal tariffs from China. The deal saw the U.S. agree to reduce the surcharge on Chinese products from 145% to 30%, and the People’s Republic pledging to drop its retaliatory taxes from 125% to 10%.

But Trump claimed on Friday, without providing any evidence, that China had “TOTALLY VIOLATED ITS AGREEMENT” with the U.S. His allegation follows comments from Bessent Thursday evening on Fox News that negotiations between the two superpowers were “a bit stalled.”

Trump’s claims against China came on the heels of court rulings that found he lacked the authority to impose all of the extensive slate of tariffs he had unveiled in early April. 

On Wednesday, the Court of International Trade, the top federal legal body that oversees trade disputes in the U.S., ruled that the 47th president didn’t have the legal authority to issue the sweeping tariffs he announced on what he called “Liberation Day” on April 2.  

But, on Thursday, a federal appeals court said, without ruling on the taxes’ legal merits, that many of Trump’s tariffs could temporarily remain while litigation plays out. The next hearing on the case is on June 5.

“The President of the United States must be allowed to protect America against those that are doing it Economic and Financial harm. Thank you for your attention to this matter!” Trump posted Thursday on Truth Social after the appeals ruling.

Despite the muddled picture on Trump’s trade war, stocks were still up since markets opened last Friday. The S&P 500 has increased about 2.2% over the past week. (They were closed for Memorial Day on Monday.) Over the weekend, the president declared, after threatening the European Union with a 50% tariff, that he would delay implementing the taxes on European exports until July 9.

This story was originally featured on Fortune.com

© ALLISON ROBBERT—AFP/Getty Images

• Alfredo Linares moved to Mexico with his wife Raegan Klein due to deportation fears in the U.S.
• The couple left Los Angeles with $20,000 in debt after closing their Japanese barbecue pop-up restaurant.
• After several months of instability, the two are finally finding some footing in Puerto Vallarta, Jalisco.

When Raegan Klein and Alfredo Linares married last summer, their dream felt straightforward and simple: start a Japanese barbecue pop-up restaurant in Los Angeles and live happily ever after.

But all of that changed in the fall when President Donald Trump, who had promised mass deportations on the campaign trail, won reelection.

Linares, who had worked his way up in fine dining to become a cook in a Michelin Star restaurant, arrived in the US as a teenager at 19 with his family and has lived here illegally ever since. Klein, a US citizen, was stricken with worry that at any moment, her husband could be arrested and deported.

"I really didn't feel safe," Klein said. "Every morning I would wake up saying, 'If we don't go and something happens to him, I'll never be able to forgive myself.' "

In March, the couple moved from Culver City to Linare's birth country of Mexico in hopes of improving their chances of building a future together.

"I lived in the shadows for 20 years," Linares said. "I'm 38 years old, so I don't think I have 10 more years of living in the shadows when I'm trying to build a business and grow as a family, as an entrepreneur."

Going into debt to move to Mexico

The couple received around $10,000 in cash from their parents as a wedding gift. They had originally hoped to use the money to hire a lawyer to help Linares gain citizenship, but they wrestled with the best way to use the money to secure a future together.

"Do we really go ahead and gamble and trust this administration with this $10,000 that our parents gave us for our wedding gifts, or do we use that $10,000 to move to Mexico?" Klein said of their dilemma.

But even the wedding gift wasn't enough to help them break even and start fresh in Mexico. The pair took on debt to start their Japanese barbecue business last spring. While they tried to get it off the ground, their bills ballooned to over $20,000. They raised over $4,000 online through GoFundMe to help them with their relocation.

Since the move, they've attempted to find jobs in hospitality, but because Linares doesn't have an identification card and Klein doesn't have work authorization as a temporary resident, it's been difficult to pay the bills.

"We're not earning an income," Klein said. "We have all of that stress and try to keep our credit card in a reasonable place and keep ourselves on a budget."

Adjusting to life in a new country

The biggest hurdle for them has been navigating the deluge of paperwork and bureaucracy in a new country.

"I'm very Americanized," Linares said. "Yes, I'm Mexican, but I haven't been here for 20 years. It's totally different from the Mexico I left."

From needing a physical copy of a birth certificate to struggling to establish Linares' permanent residence, it's been hard for him to get an ID card when they were first living in Airbnbs in Mexico City.

"I need my ID, but I cannot have an ID because I don't have a home address. And I can't get a home address because I don't have a job, because I don't have an ID," Linares said of the frustrating situation.

Now they are renting an apartment in Puerto Vallarta in the state of Jalisco, where they've been finally settling in over the past three weeks.

"I feel like myself a little bit more," Klein said of the stability. "I'm realizing that this is where we live, this is our home. We're not on vacation."

Klein is now able to see past the trials of the past few months and look toward the future with more hope. They've since brought down their rescue dog Dolly Love from Los Angeles to live with them in Mexico.

"I do believe we made the right choice," Klein said. "I do believe that there's opportunity here. I do believe in my husband and his talents and his skills."

The move to Mexico has tested their relationship and challenged them in many different ways, but Linares said the core of their bond hasn't been shaken.

They keep a routine of checking in with each other over coffee every morning. "She makes things easier, and it's because of the communication that we have," Linares said of his wife.

• Wilbur Ross, former Commerce Secretary and a key architect of Trump’s first-term trade policy, describes Trump’s current tariff strategy as a deliberate evolution: moving faster, hitting harder, and using broader executive powers to impose tariffs for both economic and diplomatic leverage.

The Trump administration’s use of tariffs has sparked debate over the ultimate goals of its economic strategy. However, a former cabinet member and key trade advisor to the President has suggested there is an underlying logic to the approach.

Since winning the Oval Office, President Trump has announced an evolving range of policies with economic sanctions spinning higher on some trade partners while others have been granted pauses.

Many of the announcements have not come through official White House channels, for example Trump threatened a 50% tariff on the EU in April in a bid to get European negotiators to the table—all posted on his social media site, Truth Social.

Indeed, Trump has come under scrutiny from Beijing, arguably the most critical region for the U.S. to make a deal, who claim America’s tariff tactics have been “coercion and blackmail” when instead it should “convey information to the Chinese side … through relevant parties.”

But Wilbur Ross, Trump’s former Commerce Secretary under the first administration, says there’s a clear tactic at play beneath Trump’s bluster.

The 87-year-old banker turned D.C. power player said there is an “art” to Trump’s dealmaking, as White House Press Secretary Karoline Leavitt has suggested, telling Fortune in an exclusive interview: “Well, everybody’s reaction to [tariffs] was first shock and amazement, but the actual retaliatory measures that they put in were fairly modest—even China didn’t match in dollar for dollar.

“There’s a real reason for that, I think the other countries, as they’ve thought about it, have recognized that while they have to talk very bravely for their domestic political constituencies … they also recognize that at the end of the day, they can’t afford a tit-for-tat escalating trade war with us.”

And this was a fact Trump was relying on, continued Secretary Ross: “One of the earliest things he put in was that 10% tariff on everything from everywhere. 

“Nobody is even complaining about that anymore. When you think about it, in the normal course, getting quietly to do a 10% tariff on everything from everywhere was a huge achievement, even if he didn’t get anything else. But because he followed it with these much more extreme things, it makes the 10% look like it’s not such a big bother.

“But it’s a huge number, and he’s been collecting it every day.”

Indeed, imported goods alone into the U.S. in 2024 stood at $3.36 trillion—even before tax, duties and levies were collected (worth $82 billion) and before imported services are added to those figures.

Even 10% of near-$3.4 trillion is an eye-watering sum to add to federal budgets, though some items like autos and steel are even higher. Indeed nations like China, Canada and Mexico are all already subject to more than the baseline 10% universal tariff.

‘A more adventurous path’

When Secretary Ross spoke to Fortune in a previous exclusive interview earlier this year, he said President Trump would be all the more confident in his second term because he now better understands the inner-workings of Washington D.C., and has a stronger mandate courtesy of a solid election sweep.

And President Trump’s tactics, which have included everything from threatening a 25% hike on Apple’s iPhones specifically to raising sanctions to more than 150% on China at some points, reflect the path Secretary Ross expected.

After all, Secretary Ross was one of the key allies in Trump’s team when renegotiating America’s position on the North American Free Trade Agreement (NAFTA). At the time, Trump was a fierce critic of the deal with Mexico and Canada and wanted to withdraw from the agreement and begin negotiating from there.

Secretary Ross felt the better tactic was to threaten such action and keep an exit as a last resort, an opinion that Trump eventually came around to agreeing with.

Likewise, having been appointed in 2017 Secretary Ross oversaw the tariff action in the first Trump administration which included sanctions on Chinese goods as well as aluminum and steel more widely.

“He has started out on a much more adventurous path than last time,” Secretary Ross told Fortune this week. “Broader in scope and more extreme in terms of the numbers themselves.”

Trump has three objectives, he adds: Shrinking trade deficits, producing revenue to offset his ‘One Big, Beautiful Bill’ and achieving other diplomatic purposes such as the flow of fentanyl into the U.S. and global defense spending.

“He has a much more fulsome, much more complicated agenda than before,” Secretary Ross explains. “It’s also different in … that last time I was very careful to set the groundwork to do public hearings, stakeholder meetings, to do written reports, to set a whole record so that under the Administrative Procedures Act we would be relatively safe from people trying to knock it out in court.

“This time, they did a very different thing. They went in mostly just by his say so using the IFA, the Emergency Powers Act, and they ran into a snag at the Court for International Trade.”

This snag may alter the course of tariff reaction on the account of businesses, he added, because their investment timelines may shift based on when the tariffs are legally approved.

But Secretary Ross added: “Most people are operating under the assumption that sooner or later, he’ll get something like what he was looking for … and therefore, while it’s slowed down a bit, don’t think it will derail [trade talks] because [foreign governments] also know there are other ways he could punish them rather than just the tariffs. 

“So it’s a bump in the road, but I don’t think it’s a huge pothole that would wreck the car.”

This story was originally featured on Fortune.com

© Mark Wilson - Getty Images

President Donald Trump reiterated Thursday he did not plan to fire Federal Reserve Chair Jerome Powell, days after saying he would “soon” pick his nominee to lead the central bank next.

“The fake news is saying, ‘Oh, if you fired him, it would be so bad, it would be so bad.’ I don’t know why it would be so bad, but I’m not going to fire him,” Trump said at a White House event on Thursday.

Trump went on to repeat his complaints that the Fed has not moved quickly enough to cut interest rates, as more evidence emerged of cooling inflation. Powell’s term as chair expires in May 2026.

“We call him ‘Too Late,’ right?” Trump said, adding he was frustrated that current elevated rates were increasing the federal government’s borrowing costs. The president said the Fed could always raise rates if inflation returned.

“Let’s say there was inflation. In a year from now, raise your rates. I don’t mind, raise your rates. I’m all for it. I’ll be the one to be calling you,” Trump said. “He’ll be too late for that too.”

The Supreme Court last month shielded the Fed from Trump’s push to fire top officials at independent agencies, calling the central bank a “uniquely structured, quasi-private entity.” 

The decision provided a measure of clarity about Powell’s job security, after Trump sent conflicting signals about whether he would try to oust the Fed chief before his term expired. Trump said in April he had no intention of firing Powell.

Fed officials are expected to hold interest rates steady at their two-day policy meeting next week. Powell and his colleagues have signaled they are waiting for more clarity on how Trump’s policy changes — including on tariffs, taxes and immigration — could affect the economy before adjusting interest rates again. 

This story was originally featured on Fortune.com

© Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images

• Stocks climbed modestly higher on Thursday as two days of low inflation readings and the conclusion of a round of talks between the U.S. and China cheered investors. Boeing plunged after the Air India crash. A 30-year Treasuries auction showed investors still want long-term U.S. debt, deficit fears notwithstanding.

Investors cheered two days of positive inflation data that sent stocks modestly higher Thursday. The S&P 500 gained 0.38%. The Dow and the Nasdaq each rose 0.24%. Boeing, however, ended the day down nearly 5% after its Dreamliner 787-8 jet was involved in a tragic plane crash that claimed the lives of more than 200 people.

The U.S. and China concluded trade talks in London earlier this week that are poised to restore trade in critical minerals to the U.S. These rare earths are used in advanced manufacturing of items like electronics and batteries.

Recent government data was also encouraging, showing that tariff-induced inflation economists have warned about for months has yet to materialize. On Thursday, the producer price index showed wholesale inflation coming in cooler than expected, a day after the consumer price index was similarly positive on consumer prices, showing inflation at a 2.4% annual rate.

“For the second day in a row, inflation data came in lower than expected, and this gives the Fed room to sit on their hands,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management. “As long as inflation isn’t increasing—or even better, is decreasing—the Fed can be patient and wait for more information on how the new tariffs and trade negotiations are going to impact the price stability part of their dual mandate later this year.”

Bond yields fell. A closely watched auction of 30-year Treasuries Thursday was awarded at 4.844%, Bloomberg reported, quelling fears that investors were starting to boycott U.S. bonds.

The dollar continued to lose ground against a basket of currencies. So far this year, the greenback has lost about 9% of its value, and is trading at its lowest level in more than three years.

GameStop fell 23% after announcing it planned to raise $1.75 billion from investors by issuing convertible bonds. Boeing lost 4.8% after the fatal crash of an Air India Dreamliner in Ahmedabad, India, that killed 241 people.

This story was originally featured on Fortune.com

© Michael Nagle—Bloomberg/Getty Images

WASHINGTON (AP) — Former U.S. Rep. Billy Long of Missouri was confirmed on Thursday to lead the Internal Revenue Service, giving the beleaguered agency he once sought to abolish a permanent commissioner after months of acting leaders and massive staffing cuts that have threatened to derail next year’s tax filing season.

The Senate confirmed Long on a 53-44 vote despite Democrats’ concerns about the Republican’s past work for a firm that pitched a fraud-ridden coronavirus pandemic-era tax break and about campaign contributions he received after President Donald Trump nominated him to serve as IRS commissioner.

While in Congress, where he served from 2011 to 2023, Long sponsored legislation to get rid of the IRS, the agency he is now tasked with leading. A former auctioneer, Long has no background in tax administration

Long will take over an IRS undergoing massive change, including layoffs and voluntary retirements of tens of thousands of workers and accusations that then-Trump adviser Elon Musk’s Department of Government Efficiency mishandled sensitive taxpayer data. Unions and advocacy organizations have sued to block DOGE’s access to the information.

The IRS was one of the highest-profile agencies still without a Senate-confirmed leader. Before Long’s confirmation, the IRS shuffled through four acting leaders, including one who resigned over a deal between the IRS and the Department of Homeland Security to share immigrants’ tax data with Immigration and Customs Enforcement and another whose appointment led to a fight between Musk and Treasury Secretary Scott Bessent.

After leaving Congress to mount an unsuccessful bid for the U.S. Senate, Long worked with a firm that distributed the pandemic-era employee retention tax credit. That tax credit program was eventually shut down after then-IRS Commissioner Daniel Werfel determined that it was fraudulent.

Democrats called for a criminal investigation into Long’s connections to other alleged tax credit loopholes. The lawmakers allege that firms connected to Long duped investors into spending millions of dollars to purchase fake tax credits.

Long appeared before the Senate Finance Committee last month and denied any wrongdoing related to his involvement in the tax credit scheme.

Ahead of the confirmation vote, Democratic Sen. Ron Wyden of Oregon, the ranking member of the Senate Finance Committee, sent a letter to White House chief of staff Susie Wiles blasting the requisite FBI background check conducted on Long as a political appointee as inadequate.

“These issues were not adequately investigated,” Wyden wrote. “In fact, the FBI’s investigation, a process dictated by the White House, seemed designed to avoid substantively addressing any of these concerning public reports. It’s almost as if the FBI is unable to read the newspaper.”

Democratic lawmakers have also written to Long and his associated firms detailing concerns with what they call unusually timed contributions made to Long’s defunct 2022 Senate campaign committee shortly after Trump nominated him.

The IRS faces an uncertain future under Long. Tax experts have voiced concerns that the 2026 filing season could be hampered by the departure of so many tax collection workers. In April, The Associated Press reported that the IRS planned to cut as many as 20,000 staffers — up to 25% of the workforce. An IRS representative on Thursday confirmed the IRS had shed about that many workers but said the cuts amounted to approximately the same number of IRS jobs added under the Biden administration.

The fate of the Direct File program, the free electronic tax return filing system developed during President Joe Biden’s Democratic administration, is also unclear. Republican lawmakers and commercial tax preparation companies had complained it was a waste of taxpayer money because free filing programs already exist, although they are hard to use. Long said during his confirmation hearing that it would be one of the first programs that come up for discussion if he were confirmed.

Long is not the only Trump appointee to support dismantling an agency he was assigned to manage.
Linda McMahon, the current education secretary, has repeatedly said she is trying to put herself out of a job by closing the federal department and transferring its work to the states. Rick Perry, Trump’s energy secretary during his first term, called for abolishing the Energy Department during his bid for the 2012 GOP presidential nomination.

This story was originally featured on Fortune.com

© Greg Nash/Pool via AP File

• JPMorgan CEO Jamie Dimon warned that the economic stimulus from the pandemic has run its course, leaving consumers with depleted savings and raising concerns that inflation could rise while employment falls, posing a challenge for the Federal Reserve’s dual mandate.

For months, Federal Reserve Chairman Jerome Powell has been nervous that the two sides of the Federal Open Market Committee’s dual mandate will end up in opposition.

Now, JPMorgan CEO Jamie Dimon has suggested he’s right: The Wall Street veteran sees inflation going up and employment rates coming down, a headache indeed for the FOMC chairman.

Dimon suggested the upset has been brewing for some time, as opposed to being symptomatic of recent volatility in economic and foreign policy.

What is driving the billionaire banker’s fears is that the pumps used to boost the economy during the pandemic have finally run dry, and consumers are at last likely to pay the price.

Thus far, Wall Street giants have been pleasantly surprised by the robust health of consumers, which prevented the economy from free-falling into a hard landing and recession.

But it seems the economy hasn’t escaped without any significant scars, with Dimon telling Morgan Stanley’s U.S. Financials conference this week the mood is “okay,” explaining: “So the consumer had money, wages are pretty good, unemployment is pretty good, they’re spending it … All the extra money from COVID is kinda gone, so the lower-end folks … have normalized.

“At the upper end, the consumer is still traveling and spending some money, their jobs are there. Their home prices are way up, their stock prices are way up, it’s looking pretty good.”

But Dimon also noted that sentiment has fluctuated since Trump took office. Per the University of Michigan’s consumer sentiment barometer, for example, the index dropped from 71.7 in January 2025 to 52.2 by April, but has since stabilized.

The stock market has similarly fluctuated, wiping billions off the net worth of some of the world’s richest people before ballooning back up again. The S&P 500, for example, is up 2.6% for the year to date at the time of writing.

“The corporate side’s the same thing,” continued Dimon, per a recording obtained by Fortune. “Sentiments dropped, sentiments are coming back up, but business is still okay.

“But the buts are real—I’m not trying to be negative. We spent $10 trillion … Well, of course consumers have more money, we gave it to them. Of course businesses are doing better, consumers spent the $10 trillion—that goes right through P&Ls in every industry out there.

“And then we had QE [quantitative easing] … and the real reversal is just starting.”

Dimon’s $10 trillion figure is understood to refer to the global spending governments committed to boosting their economies during the pandemic.

He added: “Then you have all these really complex, moving tectonic plates around trade, economics, geopolitics, and future factors, which I think are inflationary: military, restructuring of trade, ongoing fiscal deficits, so it’s okay, but whenever you say ‘consumer sentiment’ remember neither consumers nor businesses ever pick the inflection points, they never have.

“If you’re looking for that inflection point … they’re not going to tell you that, you’re going to see real numbers, and I think there’s a chance real numbers will deteriorate. Employment will come down a little bit, inflation will go up a little bit—hopefully, it’s just a little bit.”

Worry about the ‘big ones’

Dimon added he wouldn’t worry about smaller fluctuations in metrics such as inflation and the employment rate, but would be more focused on wider issues (as he calls them, the “big ones”) like geopolitics, trading partnerships, and the militarization of the world.

This will be no surprise to those who have avidly read Dimon’s shareholder letters over the past few years.

In his most recent letter, for example, he cautioned the White House against pushing key allies too far away: “Keeping our alliances together, both militarily and economically, is essential. The opposite is precisely what our adversaries want.”

“This is going to be hard, but our country’s goal should be to help make European nations stronger and keep them close. If Europe’s economic weakness leads to fragmentation, the landscape will look a lot like the world before World War II.”

He added: “Economics is the longtime glue, and America First is fine, as long as it doesn’t end up being America alone.”

This story was originally featured on Fortune.com

© Noam Galai—Getty Images

• The impact of tariffs will depend on who bears their cost, says Jeff Klingelhofer, managing director at Aristotle Pacific—but it doesn’t have to be the consumer, who is “tapped out.” Corporations can better handle an import tax hit because margins “have never been higher,” he says.

With U.S.-China talks ending in essentially a tariff stasis, investors are once again looking at the economy to figure out just how much of a shock the tariffs are going to be. 

“The system is incredibly, incredibly fragile,” Jeff Klingelhofer, managing director and portfolio manager at Aristotle Pacific, told Fortune. However, the amount of shock tariffs ultimately deliver will depend on who bears the cost, he said. 

Typically, that’s the end user. Importers and economists have for months been saying that the consumer usually pays the cost of import taxes. 

“Most suppliers are passing through tariffs at full value to us,” a chemical products company told the Institute of Supply Management in a survey last month. “[T]axes always get passed through to the customer.” Studies of the 2018-2019 tariffs, which were much smaller, found nearly 100% of the added costs were passed on to the consumer. The Yale Budget Lab estimates that tariffs will cost the typical household $2,836 over the year. 

Except, Klingelhofer said, this time could really be different. 

“It doesn’t have to be the U.S. consumer” that pays tariffs. “You’re likely to see companies ultimately bear more of the pain of tariffs than consumers.”

Indeed, after absorbing four years’ worth of price hikes and shrinkflation on everything from household staples to housing, consumers may not be able to take much more pain. A record 77% are holding some debt, according to the Federal Reserve.

“The state of consumers is tapped out,” Klingelhofer said. However, “Corporate balance sheets are incredibly strong — margins have essentially never been higher in the history of humankind.” 

Indeed, corporate profits as a portion of national income, a figure that never exceeded the single-digits until about two decades ago, surged to a record 13.6% in 2021. At they start of this year, they were just slightly lower, at 12.8%. 

Companies have an additional incentive to absorb the cost of at least some of the tariffs, he said—the president, whom CEOs have been loath to cross, is watching. Trump’s spat with Walmart in May, directing the retailer to “eat” the cost of tariffs, is a prime example of the type of public policy via social media Klingelhofer said will be much more common if tariffs start to get passed on.

While the exact level of tariffs that companies, consumers and everyone else will pay is still up in the air, Klingelhofer says the direction is clear: “iIt’s going up notably.”

“I find it very hard to believe we exit this presidency with tariffs anywhere below the low teens, versus 1.7% of GDP,” their average level at the beginning of 2025, he said.

This story was originally featured on Fortune.com

© Jordan Gale/Bloomberg via Getty Images

• The S&P 500 posted a 0.27% decline on Wednesday as investors weighed Trump’s scant-on-details trade deal with China as well as an inflation report that outperformed analysts’ expectations.

The stock markets dropped on Wednesday despite a seemingly positive development in the trade war between the U.S. and China alongside a better-than-expected inflation report for May. The S&P 500 dipped 0.27%, the Nasdaq fell 0.50%, and the Dow Jones closed the day essentially flat.

“OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME,” President Donald Trump posted Wednesday morning on his social media platform Truth Social, referring to President Xi Jinping of China.

Trump gave few specifics but said that China would continue to export magnets and rare earth materials to the U.S. and only implement a 10% tariff on American goods. The U.S., in turn, would enforce a 55% tariff on exports from the People’s Republic of China to the U.S. and let Chinese students continue to attend American colleges and universities.

The U.S. and China had previously levied tariffs as high as 145% and 125% on each other, respectively. Trump’s administration had also signaled it would start to cancel student visas for Chinese students in a move that a Chinese foreign minister called “discriminatory.”

It remains unclear when the trade deal between the two superpowers goes into effect or whether the U.S. offered China any more concessions. Xinhua, a Chinese state news agency, said the U.S. and China had “candid and in-depth talks” in its evaluation of the agreement.

Meanwhile, the Bureau of Labor Statistics released its Consumer Price Index report for May. The U.S. agency noted that inflation had only creeped up by 0.1% from April to 2.4%. That was slightly less than the median estimate of 2.5% from economists polled by FactSet.

Analysts had worried that Trump’s aggressive set of tariffs would increase prices for American consumers. Still, some warn that the full effect of the White House’s trade war hasn’t percolated throughout the economy. “It’s encouraging to see inflation moderate further, and yet we are aware of the possibility of some tariff-related lift in prices coming in the back half of the year,” wrote Rick Rieder, chief investment officer of global fixed income at BlackRock.

Wednesday’s market dip followed a week of gains. In June, the S&P 500 neared the all-time highs it posted in February, which was shortly after the 47th president’s inauguration.

This story was originally featured on Fortune.com

© Anna Moneymaker—Getty Images

• Gen Zers are having a difficult time buying a house because of the increasing costs of homeownership—and because many are drowning in debt related to student loans, credit cards, and buy-now, pay-later payments. Just 3% of homeowners in the U.S. are Gen Z, according to the National Association of Realtors.

Buying a house has long been the American dream. It’s a sign of financial stability and is often considered one of the ultimate investments one can make. 

But finding that white-picket fence is out of reach for most Gen Zers, who are now saddled with paying off personal debt—and it’s making that generation fall behind in homeownership, according to Realtor.com.

Young people just want to pay off their debt, according to a report by payments-data provider PYMNTS Intelligence. On average, Gen Zers carry more than $94,000 in personal debt, a Newsweek poll shows, which far surpasses millennials with almost $60,000 in debt and Gen X with about $53,000 in debt. Part of the struggle comes in with how much Gen Zers are paying for rent each month, leaving little to save for a down payment. 

About one-third of Gen Zers say they’re financially underwater due to inflation, high interest rates, and stagnant wages, Natalia Brown, chief compliance and consumer affairs officer with National Debt Relief, told Fortune. 

“Many [Gen Zers] are entering adulthood with a heavy financial burden—student loans, credit card debt, and rising costs of living,” Brown said. “Their debt feels heavier because it hits earlier—right as they’re launching their careers.”

“Add in credit cards, medical bills, and buy-now-pay-later services, and the result is a dangerous snowball effect,” she added. 

The real cost of homeownership

According to the National Association of Realtors (NAR), Gen Zers make up just 3% of all homebuyers. That may not be that surprising considering mortgage rates continue to be comparatively high, nearing 7%. 

Meanwhile, U.S. home prices have far outpaced wages, according to the Joint Center for Housing Studies of Harvard University. The current median home price in the U.S. is more than $403,000, NAR data shows, while the Social Security Administration reports the national average wage index is about $66,600. 

Assuming today’s mortgage rate, a 20% down payment, and the national average salary, it would be essentially impossible to purchase a median-priced home without spending more than one-third of your monthly income on housing. 

Nikki Beauchamp, an associate broker with Sotheby’s International Realty in New York City, said high interest rates are a major preventative factor for Gen Zers being able to buy real estate. 

“The cost of homes is substantially higher than it was for previous generations, and you may not see as many starter homes being built or becoming available,” Beauchamp told Fortune. “Add to that the student loan debt, and in general, it has been my observation that as a result they have much higher debt than my generation [Gen X] did at that age.”

Advice for Gen Zers who want to own a home

While mounting debt can feel overwhelming and homeownership out of reach, there are ways to organize how you’re paying off your debt. 

Financial advisors suggest paying off high-interest debt like credit cards first, since many of them carry a rate above 25%, which can make it feel nearly impossible to pay off. It can be easier to budget around other debt like student loans and car payments, Elizabeth Schleifer, a financial advisor with Armstrong, Fleming & Moore, told Fortune, adding a good rule of thumb is that total monthly debt payments should be less than 36% of gross monthly income.

“Look at your existing debt and determine how much room, if any, there is for a mortgage payment,” Schleifer said. “If your debt levels are already too high, your only focus should be paying these down.”

Advisors also recommended that Gen Z avoid buy-now, pay-later services as much as possible because it can lead to a “trap of small, repeated purchases that add up,” Brown said. 

Beauchamp also reminds Gen Zers there are several other ways to break into the housing market aside from traditional ownership. 

“Real estate has many different permutations, including co-ownership, fractional ownership that might be intriguing for those looking to start to get on the ladder of property ownership,” she said.

This story was originally featured on Fortune.com

© Getty Images—Mementojpeg

A federal appeals court agreed Tuesday to let the government keep collecting President Donald Trump’s sweeping import taxes while challenges to his signature trade policy continue on appeal.

The decision by the U.S. Court of Appeals for the Federal Circuit extends a similar ruling it made after another federal court struck down the tariffs May 28, saying Trump had overstepped his authority. Noting that the challenges to Trump’s tariffs raise “issues of exceptional importance,” the appeals court said it would expedite the case and hear arguments July 31.

The case involves 10% tariffs the president imposed on almost every country in April and bigger ones he imposed and then suspended on countries with which the United States runs trade deficits. It also involves tariffs Trump plastered on imports from China, Canada and Mexico to pressure them to do more to stop the illegal flow of immigrants and synthetic opioids across the U.S. border.

In declaring the tariffs, Trump had invoked emergency powers under a 1977 law. But a three-judge panel of the U.S. Court of International Trade ruled he had exceeded his power.

The tariffs upended global trade, paralyzed businesses and spooked financial markets.

This story was originally featured on Fortune.com

© Luis M. Alvarez—AP

Senior U.S. and Chinese negotiators have agreed on a framework to get their trade negotiations back on track after a series of disputes that threatened to derail them, both sides have said.

The announcement came at the end of two days of talks in the British capital that wrapped up late Tuesday.

The meetings appeared to focus on finding a way to resolve disputes over mineral and technology exports that had shaken a fragile truce on trade reached in Geneva last month. It’s not clear whether any progress was made on the more fundamental differences over China’s sizeable trade surplus with the United States.

“First we had to get sort of the negativity out and now we can go forward,” U.S. Commerce Secretary Howard Lutnick told reporters after the meetings.

Asian stock markets rose Wednesday after the agreement was announced.

The talks followed a phone call between President Donald Trump and Chinese leader Xi Jinping last week to try to calm the waters.

Li Chenggang, a vice minister of commerce and China’s international trade representative, said the two sides had agreed in principle on a framework for implementing the consensus reached on the phone call and at the talks on Geneva, the official Xinhua News Agency said.

Further details, including any plans for a potential next round of talks, were not immediately available.

Li and Wang Wentao, China’s commerce minister, were part of the delegation led by Vice Premier He Lifeng. They met with Lutnick, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer at Lancaster House, a 200-year-old mansion near Buckingham Palace.

Wendy Cutler, a former U.S. trade negotiator, said the disputes had frittered away 30 of the 90 days the two sides have to try to resolve their disputes.

They agreed in Geneva to a 90-day suspension of most of the 100%-plus tariffs they had imposed on each other in an escalating trade war that sparked fears of recession. The World Bank, citing a rise in trade barriers, cut its projections Tuesday for U.S. and global economic growth this year.

“The U.S. and China lost valuable time in restoring their Geneva agreements,” said Cutler, now vice president at the Asia Society Policy Institute. “Now, only sixty days remain to address issues of concern, including unfair trade practices, excess capacity, transshipment and fentanyl.”

Since the Geneva talks, the U.S. and China have exchanged angry words over advanced semiconductors that power artificial intelligence, visas for Chinese students at American universities and rare earth minerals that are vital to carmakers and other industries.

China, the world’s biggest producer of rare earths, has signaled it may speed up the issuing of export licenses for the elements. Beijing, in turn, wants the U.S. to lift restrictions on Chinese access to the technology used to make advanced semiconductors.

Lutnick said that resolving the rare earths issue is a fundamental part of the agreed-upon framework, and that the U.S. will remove measures it had imposed in response. He did not specify which measures.

“When they approve the licenses, then you should expect that our export implementation will come down as well,” he said.

Cutler said it would be unprecedented for the U.S. to negotiate on its export controls, which she described as an irritant that China has been raising for nearly 20 years.

“By doing so, the U.S. has opened a door for China to insist on adding export controls to future negotiating agendas,” she said.

In Washington, a federal appeals court agreed Tuesday to let the government keep collecting tariffs that Trump has imposed not just on China but also on other countries worldwide while the administration appeals a ruling against his signature trade policy.

Trump said earlier that he wants to “open up China,” the world’s dominant manufacturer, to U.S. products.

“If we don’t open up China, maybe we won’t do anything,” Trump said at the White House. “But we want to open up China.”

This story was originally featured on Fortune.com

© Li Ying—Xinhua via AP

YouTube's impact report shows that the creator economy has continued to grow, despite less interest from venture capitalists.

• After running interest rates near zero for a decade and a half, the Federal Reserve has turned cautious and is unlikely to cut anytime soon, according to Jeff Klingelhofer, a managing director and portfolio manager for Aristotle Pacific Capital. That’s because the central bank is concerned about social stability and inequality following its brush with record-high inflation—and low rates make inequality worse.

Most everyone knows about the Federal Reserve’s dual mandate. Set by Congress, the charge for the U.S. central bank is twofold: Create the conditions for stable prices (i.e., low inflation) and maximum employment. (The third mandate—to moderate long-term interest rates—flows naturally out of keeping inflation steady.) 

Increasingly, though, the third mandate is changing, according to Jeff Klingelhofer, a managing director and portfolio manager for Aristotle Pacific Capital, an investment advisory. And that new task is social cohesion.

It’s a tough call for an entity that has seemed somewhat battered in recent years, bruised by its failure to catch COVID-era inflation in time and, increasingly, in a fight with the president of the United States, who is pressing on the Fed’s nominally independent head to lower interest rates. 

“It’s out with the old—financial stability—and in with the new: social stability,” Klingelhofer told Fortune. 

Klingelhofer notes that, before the 2007-2009 Global Financial Crisis, the Fed used to be very proactive in raising interest rates, hiking them well before any sign of inflation. Post-crisis, when unemployment was stubbornly slow to fall, critics accused the Fed of hiking rates too quickly and stymieing the recovery. (The Fed’s first rate cut came in late 2015, with unemployment at 5% and the Fed’s preferred measure of inflation at just 1%.) Inflation didn’t come close to hitting the Fed’s 2% target for seven years after the hike. Years later, two Fed governors admitted they got the balance wrong and should have kept rates lower for longer.

In 2020, that shifted. The Fed, by keeping rates low, “learned the biggest wage gains went to the lowest earners,” Klingelhofer said. “Coming out of COVID, the third mandate was social stability, compression of the wage gap.” 

But the central bank also got burned with its prediction inflation would be “transitory.” That miss, coupled with the fastest and steepest rate-hiking cycle in modern history, has made the central bank loath to move too quickly on cutting rates this time. 

This shift is evident in the tenor of Chair Jerome Powell’s speeches, starting at Jackson Hole, Wyo., in 2022. 

“Without price stability, the economy does not work for anyone,” Powell said in 2022, adding the Fed was “taking forceful and rapid steps to moderate demand… and to keep inflation expectations anchored.” 

“We will keep at it until we are confident the job is done,” he said.

That experience has pushed the Fed from proactive to reactive, Klingelhofer said. “They’ll need to see inflation below 2%, and think it’ll stay there.”

If a recession hits, “I don’t think the Fed will step in as they have in the past,” he added. “Maybe if it’s a deep recession, with high unemployment, and inflation falls below 2% dramatically—maybe.” 

Low rates inflate assets

Historically low interest rates had another effect—they redistributed wealth upward by encouraging asset bubbles. In this way, as a recent body of economic research has shown, low rates have contributed to skyrocketing wealth inequality. 

Low interest rates tend to juice stock-market appreciation, benefiting the 10% of the population that owns more than 90% of stock, and encourage investors to create novel assets as they chase bigger returns. These benefits accrue most to those who have the biggest financial assets—i.e., the wealthiest—while doing little for the poor. 

And while low rates encourage higher employment, “the 1% of Americans who own 40% of all the assets just get tremendous gains before that first job is created for the middle class,” said Christopher Leonard, who criticized the Fed’s ultra-low-rate policies in The Lords of Easy Money, a 2022 book describing this dynamic. In this way, he said, the Fed exacerbates the gap between the ultra-rich and the rest of us, which he called “the defining economic dysfunction of our time.”

It’s another argument against cutting rates, in addition to the risk of reigniting inflation—whose burdens, as Powell repeatedly notes, “falls heaviest on those who are least able to bear them.”

“The alchemy of low interest rates is over,” Klingelhofer says. He isn’t convinced the Fed has that much influence on rates like the 10-year Treasury, which closely influences mortgage rates. These bonds trade in international markets where investors buy or sell them based on how they perceive the risks of U.S. debt. 

“Where should 10-year Treasuries be? With inflation at 3%, and the government running 6-7% deficits, 4.5% feels roughly correct,” he said. 

In fact, some economists say the Fed’s cutting rates would be perceived as a recession indicator—and would have the opposite effect, sending bond yields and interest rates soaring.

As Redfin economics research head Chen Zhao told Fortune previously, “the Fed only controls that one Fed funds rate. Everything else is determined by markets.”

This story was originally featured on Fortune.com

© Chip Somodevilla/Getty Images

The U.S. and China held a second day of talks Tuesday in London aimed at easing their trade dispute, after President Donald Trump said China is “not easy” but the U.S. was “doing well” at the negotiations.

A Chinese delegation led by Vice Premier He Lifeng met U.S. Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer for several hours on Monday at Lancaster House, an ornate 200-year-old mansion near Buckingham Palace.

Wang Wentao, China’s commerce minister, and trade negotiator Li Chenggang are also in Beijing’s delegation.

Lutnick said as he arrived Tuesday morning that the talks were “going well,” and he expected them to continue all day.

Asked late Monday how the negotiations were going, Trump told reporters: “We are doing well with China. China’s not easy.”

The two sides are trying to build on negotiations in Geneva last month that agreed to a 90-day suspension of most of the 100%-plus tariffs they had imposed on each other in an escalating trade war that had sparked fears of recession.

Since the Geneva talks, the U.S. and China have exchanged angry words over advanced semiconductors that power artificial intelligence, visas for Chinese students at American universities and rare earth minerals that are vital to carmakers and other industries.

Trump spoke at length with Chinese leader Xi Jinping by phone last Thursday in an attempt to put relations back on track. Trump announced on social media the following day that the trade talks would resume in London.

China, the world’s biggest producer of rare earths, has signaled it may ease export restrictions it placed on the elements in April, alarming automakers around the world who rely on them. Beijing, in turn, wants the U.S. to lift restrictions on Chinese access to the technology used to make advanced semiconductors.

Trump said that he wants to “open up China,” the world’s dominant manufacturer, to U.S. products.

“If we don’t open up China, maybe we won’t do anything,” Trump said at the White House. “But we want to open up China.”

This story was originally featured on Fortune.com

© Li Ying—Xinhua via AP

The UK’s FTSE 100 index was set to close at a record high for the first time since March, recouping its tariff-induced slump thanks to an improving economic outlook and easing trade tensions.

The export-heavy index rose as much as 0.4% to 8871.41 level, surpassing its March peak of 8,871.31 points. The UK gauge is catching up to a global equities benchmark and a key European peer in Germany’s DAX index, which have both reclaimed their record highs after April’s rout. 

The UK benchmark is still 0.4% below its intraday record of 8,908.82, and sentiment remains fragile as London faces an exodus of companies moving listings to the US and shelving initial public offerings. Defense contractors Babcock International Group Plc and BAE Systems Plc, as well as precious metals miner Fresnillo Plc, are among the biggest gainers in the index this year.

The FTSE 100 rebounded strongly after President Donald Trump paused some of the highest tariffs in a century in April and the UK secured a trade framework with the US. Economic data have also improved, with UK business confidence surging to a nine-month high in May. 

“UK stocks are among the cheapest in Europe,” said Georges Debbas, head of European equity derivatives strategy at BNP Paribas Markets 360. “The country is also the most friendly to the US, as it’s the only one to have a firm trade agreement in place. That allows you to have a more constructive view on the market.”

Still, the gauge has trailed other European benchmarks, which benefited from lower interest rates and heavy fiscal stimulus plans led by Germany. The FTSE 100 has advanced 8.5% in 2025, far behind a 21% rally in the German benchmark. Meanwhile, Spain’s IBEX 35 Index is up 23%, while Italy’s FTSE MIB has jumped 18%.

The UK’s stock market has shrunk in recent years amid deal-related delistings, compounded by a lean flow of IPOs and some companies shifting their primary listings to the US in search of more trading liquidity.

This story was originally featured on Fortune.com

© Mike Kemp/In Pictures via Getty Images

• Turmoil on the streets didn’t faze the stock markets Monday, which continued to rise on hopes of U.S.-China trade progress, coming within striking distance of all-time highs set earlier this year.

Stocks continued their steady climb higher on Monday as the U.S. and China restarted trade talks and the White House clashed with California over sending military officers to quell civilian protests.

The S&P 500 gained 0.17%, moving within 2% of its all-time high just two months after losing 20% in April following President Donald Trump’s announcement of reciprocal tariffs. The Dow rose 0.07% and the Nasdaq gained 0.36%.

“There have been plenty of catalysts supporting the broader market’s recovery from the correction lows set last month,” Adam Turnquist, chief tactical strategist at LPL Financial, said in a note. “First quarter earnings season came in much better than feared, and most companies unexpectedly did not pull forward guidance. President Trump’s announcement of a 90-day pause on most reciprocal tariffs eased fears of an escalating trade war, while continued progress in trade negotiations further supported the risk-on rally. Steady retail buying and a slow return of institutional demand also supported the rebound.”

Tesla closed 4.3% higher after suffering its largest-ever market wipeout last week. CEO Elon Musk had fought with Trump over the president’s tax-cutting bill that is projected to add trillions to the national debt.

Apple lost 1.1%. The iPhone maker, which today held its annual developer conference, WWDC, has lagged in its artificial-intelligence efforts. Executives at the conference told attendees that a promised smarter version of its Siri virtual assistant wouldn’t be available until later this year.

Warner Bros. Discovery lost 3.2%, giving up a pop after the entertainment giant announced plans to split into two companies, separating its traditional TV business from its streaming unit.

“The diverging fortunes of streaming and traditional pay TV have been unmistakable for years, so it was only a matter of time before the dominoes started falling,” Paul Verna, vice president of content at eMarketer, told Yahoo Finance.

Negotiators from the U.S. and China were meeting in London on Monday to quash a simmering trade dispute. The two sides had struck a preliminary agreement in Geneva last month, only for China to strengthen restrictions on exports of critical minerals, including rare earths which are essential for technology, from cars to electronics.

On the West Coast, California was on its third day of protests after high-profile clashes between demonstrators and Immigration and Customs Enforcement (ICE) agents prompted President Donald Trump to send in the National Guard, against the wishes of Governor Gavin Newsom.

Yields on the 10-year and 30-year Treasuries fell.

This story was originally featured on Fortune.com

© Getty Images

Look, no one said building a large harvester to roam around the Moon and sift through hundreds of tons of regolith to retrieve small amounts of helium-3 would be easy. And that's to say nothing of the enormous challenge of processing and then launching any of this material from the lunar surface before finally landing it safely on Earth.

If we're being completely honest, doing all of this commercially is a pretty darn difficult row to hoe. Many commercial space experts dismiss it out of hand. So that's why it's gratifying to see that a company that is proposing to do this, Interlune, is taking some modest steps toward this goal.

Moreover, recent changes in the tides of space policy may also put some wind in the sails of Interlune and its considerable ambitions.

Read full article

Comments

© Interlune

• A recent study by SmartAsset found that single adults with no kids (SINKs) in the U.S. need an average income of $102,648 to live comfortably, far above the national average salary of $59,228, with affordability varying significantly by state. While earlier research suggested happiness plateaus at a certain income, newer studies show that for many, happiness continues to increase with higher earnings, especially beyond $100,000.

If you feel like you simply haven’t got enough money in the bank to enjoy a comfortable life, you’re not alone.

A recent study from financial advisors SmartAsset found that even in America’s most affordable state, West Virginia, single adults with no kids (SINKs) need to earn at least $80,829 to live comfortably.

By SmartAsset’s metrics, this means being able to afford some lifestyle benefits such as hobbies and vacations, as well as financial goals such as retirement savings and education funds. Moreover, that salary also needs to cover housing, groceries, transportation and medical expenses.

The study was modeled on the popular 50/30/20 budget rule, which suggests allocating 50% of income to necessities, 30% to discretionary spending, and 20% to long-term goals like retirement savings or paying off debt.

For some people, a vacation and the ability to save for older age are a given of employment.

Yet for a huge portion of society, living a secure financial life is the definition of the American Dream.

The average wage needed to comfortably live in America as a single adult is now more than six figures: $102,648, according to SmartAsset.

This is a far cry from the average salaries of Americans.

In June 2024, Fidelity analyzed the Bureau of Labor Statistics to discover that the average salary for workers in the U.S. is $59,228—a fraction of the average funds needed to live comfortably in any state SmartAsset analyzed.

Men fared relatively better than women, taking home a median wage of $1,227 per week or $63,804 per year. For women, that figure stood at $1,021 per week or $53,092 per year—approximately a fifth less than their male counterparts.

Hawaii was the least affordable state for staffers to live comfortably and save for the future. There, staffers need to earn a little over $124,000 to enjoy a holiday, pay their bills, and save for the long term.

For a family of four, that figure skyrockets to over $294,000.

Massachusetts was the second-most expensive state and the state where it is most costly to raise a family, coming in at a little over $120,000 per SINK and near $314,000 for a family.

The most affordable state in the U.S. is West Virginia, where a SINK can live comfortably on just under $81,000 a year.

However, it’s not the most inexpensive state to raise a family. That goes to Mississippi, where SINK’s need $86,320 to live comfortably alone, but families need $186,618.

Other more affordable states for both single workers and families include Arkansas, North and South Dakota, Kentucky and Alabama.

Comfort or happiness?

Of course, some Americans will not just aspire to be comfortable financially but want to earn enough to make them happy.

Previously, barometers have suggested that a certain figure can be attained to achieve happiness, and then the effects of more money don’t improve outlook.

For example, in 2010 the late Daniel Kahneman, a winner of the Nobel Prize in economics, and his colleague and fellow Nobel Prize winner Angus Deaton, found that happiness increases with income up until $75,000, after which it plateaus.

But in 2021—more than a decade later, a new study discovered that for some people the limit on how much money could improve people’s happiness does not exist.

University of Pennsylvania professor Matthew Killingsworth found that happiness increased alongside income with no limit.

A further study, submitted a year later, discovered that correlations between money and happiness were split into three groups based on well-being: the least happy, the middle-range happy, and the most happy.

Economists found that happiness rose with income until $100,000 for the least happy group and then plateaued. For those in the middle range of emotional well-being, happiness continued increasing linearly with income with no limit. For the happiest group, happiness rose and accelerated once they were past $100,000.

This story was originally featured on Fortune.com

© Alina Rudya/Bell Collective - Getty Images

The UK’s finance industry kept its lead over the rest of Europe in attracting foreign investment last year, although activity across the region slowed, according to professional services firm EY. 

The country attracted foreign investment for 73 finance projects last year, down by 32% on the prior year, while in second-place Germany, deal volumes fell 16% to 32. Throughout Europe, volumes fell 11%, EY found. 

Global investors also saw London as the most attractive European city for financial services foreign investment over the coming year, beating out Frankfurt and Paris, although at a national level, Germany was the preferred choice for the future.

With Donald Trump’s tariff announcements clouding the outlook, the poll found just 32% were likely to invest in the US, compared to 39% in the EU and 44% for the UK.

“The strength and depth of the UK’s financial services sector continues to capture global investor confidence – particularly as they navigate challenging market conditions,” said Martina Keane, managing partner at EY UK and Ireland financial services. However, she said competition remained fierce for available financing. 

This story was originally featured on Fortune.com

© Getty