• 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

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

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

• 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

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.

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• 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

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

• Ireland's basic income pilot program for the arts ends in August.
• For three years, 2,000 artists and creative arts workers received about $370 a week.
• Recipients said the stipend overall improved their daily lives.

For about 2,000 artists and creative arts workers in Ireland, a weekly stipend provided through a basic income program has been a lifeline for years.

Now, it's almost over.

The pilot program began in 2022 under Catherine Martin, Ireland's former minister for tourism and culture. Martin allocated about $28 million to the arts sector following the COVID-19 pandemic.

Participants were randomly chosen and given an unconditional stipend of €325, or about $370, weekly for three years. During that time, participants met periodically via Zoom to discuss how the additional income had affected their livelihoods, careers, and ability to meet basic needs.

The final session was held this month before the program's conclusion in August.

Artists and cultural workers who attended the session grappled with what their lives would look like after August, but they hoped government officials would extend the program.

"We need no further pilots. People need a UBI now to face and deal with the many social, economic, and ecological crises of our world," Reinhard Huss, the organizer of UBI Lab Leeds, which sponsored the event alongside Basic Income Ireland, UBI Lab Arts, and UBI Lab Network, told Business Insider.

New developments in AI are reshaping the job market, replacing some entry-level positions. Tech industry leaders like Elon Musk and OpenAI CEO Sam Altman have said implementing a universal basic income will be essential in the near future when AI supplants jobs in most industries.

A universal basic income offers an entire population recurring, unconditional payments regardless of an individual's socioeconomic status. Ireland's program, like many others in the United States, is a guaranteed basic income, which targets certain segments of the population for a set period of time.

Impact of Ireland's basic income program for artists

Jenny Dagg, a sociologist lecturing at Ireland's Maynooth University, authored a new report that provides insights into participants' reactions to the program. She gathered data from over 50 of the 2,000 recipients.

Although the report outlined nearly a dozen key impacts reported by program recipients, Dagg highlighted five major takeaways during the Zoom session.

Dagg said that recipients who received money from the program reported more stability and "significantly reduced" financial stress. It relieved their anxiety about fulfilling their basic needs.

Participating in the pilot program also allowed artists to re-prioritize how they spend their time and what they choose to focus on. "The opportunity to focus more on their specific creative interests opened new possibilities and career trajectories," the report said.

Artists said the added income allowed them to spend more time "researching, experimenting, taking risks, and failing," which has improved the quality of their work.

Artists, the report said, also felt more confident in themselves and their work during the program. "Many recipients talk of feeling empowered, of being in control of the choices within their lives, and envisioning a viable career path longer-term," the report said.

Recipients even reported better mental health, which led to improved sleep quality and lowered stress levels.

What's next for Ireland's basic income program

With the end of the program fast approaching, recipients of the weekly payment are reckoning with what how their lives might change.

"Across art forms, recipients report concerns about financial stability and sustaining the momentum of their careers when, or if, the basic income scheme ends," Dagg's report said.

This month, Basic Income Ireland called on the government to immediately implement a universal and unconditional basic income for the country. A spokesperson for the UBI Lab Network said the pilot program's success shows that basic income is a viable option. The campaign group shared a proposal for introducing a universal basic income to Ireland.

"As the pilot shows, basic income works and people need a UBI now to face and deal with the many social, economic, and ecological crises of our world. The Network will continue to help demonstrate basic income within communities and show how it is a sustainable policy," the statement said.

Patrick O'Donovan, Ireland's minister for arts and culture, said he would evaluate the data collected throughout the pilot program and create proposals for the government regarding the next steps.

"I am heartened by the responses of the Basic Income recipients in this paper," O'Donovan said in the May report. "This research will add to the evaluation being conducted by my department, which to date clearly shows that the Basic Income Pilot has been an effective support for the artists in receipt of it."

• Some Americans are traveling to Europe this summer despite their concerns about the economy.
• Travelers are budgeting, but many aren't giving up bucket-list trips abroad, a Deloitte survey found.
• Euro summer is a priority, especially for millennials and Gen Z, a travel content creator said.

The American dream may be struggling, but for many, the Euro summer dream is alive and well.

Jimin Shim, a millennial copywriter who lives in Denver, has plenty of concerns about the economy, from stock market volatility that she feels has been brought on by the current administration to a tough job market.

Still, she's vacationing in Portugal later this month, and treating her mom to the trip too.

"Traveling is very important to me. I try to do at least one international trip a year and then maybe a couple of domestic trips," she told Business Insider. "And because I know that that is a priority for me, it's something that I budget for and am saving up for all year round."

While there's been some softening in leisure travel demand this year, data and surveys suggest Shim is one of many Americans who are weighing their international travel plans against their worries about the economy and saying, "book it."

The extent to which Americans are pulling back on international trips this summer is not fully clear. An analysis from Cirium, an aviation analytics company, found summer bookings from the US to Europe were down nearly 10% from January to May compared to last year. Meanwhile, a summer travel survey from Deloitte, released in May, found more Americans were traveling internationally this summer compared to 2024, with most headed to Europe. And a recent data analysis by Allianz Partners, a travel insurance and assistance company, found summer travel from the US to Europe would increase by 10% in 2025.

The economy isn't the only reason Americans might rethink travel to Europe this summer. The weakening US dollar doesn't go as far as it used to, and some Americans are worried about their safety or not feeling welcomed abroad due to the current administration's approach to foreign policy.

Americans are also waiting longer to book their trips, which could complicate the picture.

Still, it's clear that many Americans are traveling abroad despite the downturn in consumer sentiment.

"I think you're seeing a hesitancy," Amir Eylon, president and CEO of Longwoods International, a market research consultancy that specializes in the travel tourism industry, told BI. "I still believe a majority of American travelers who were planning to go abroad are still going to go abroad."

The enduring appeal of Euro summer

Eylon said that while there are indications of a slowdown, it does not look like a "game-changing" shift. His firm's monthly consumer sentiment survey of 1,000 travelers found the number of American travelers who said they were very likely to take an international trip in the next 12 months declined from 25% in January to 19% in May.

He noted travelers seemed to be in a "wait and see" mode this spring, echoing what other industry experts have said and previously told BI — that travelers are booking closer to travel dates, in part as they search for good deals.

Eylon said it is possible there will be an overall decline in Americans visiting Europe this year, but it's too soon to tell the full picture. He thinks those canceling or ditching trip plans will be in the minority.

"American travelers view it as a need more than a want," he said of travel, adding that many see it as a "right."

Meredith Pierce, a travel content creator based in Atlanta, said that's exactly how she and many other millennials and Gen Zers view travel, including to Europe. Pierce posts a lot of popular "Euro summer" content and sees it as a persistent and lasting travel trend, even when folks have financial concerns.

"Everyone loves the idea of sipping an Aperol spritz and looking at the Mediterranean," Pierce said, "especially if maybe you are stressed in your day-to-day life because of politics or the economy or budgets, or anything like that. A bit of escapism I think comes into play there as well."

The hesitancy fueled by economic uncertainty could also make it a bit more affordable to travel to Europe this summer. Eylon noted the slowdown in leisure travel led to some declines in airfare prices, which may have pushed some hesitant Americans to take the plunge.

When economic concerns, largely fueled by Trump's tariff policy, intensified in March and April, some airlines suspended their forecasts for the year, and flight prices declined.

Rather than get spooked by the economic uncertainty, Pierce believes plenty of people pounced. Her "Euro summer" content from last year started going viral, and she was getting flooded with DMs and questions from people who found a cheap flight to Europe and were suddenly planning their trips.

Pierce said some budget-conscious travelers are opting for more affordable and under-the-radar destinations in Europe, such as Albania or Poland, which feature similarly picturesque scenes but at a lower cost than Italy or Paris.

More frugal spending once they get to their destination

Deloitte's summer travel survey noted that many American travelers already had their big summer trips partially or even fully booked by April, when concerns around tariffs and the economy intensified. The survey also found that while consumers' sense of financial well-being was down year-over-year in April, slightly more Americans planned to take leisure vacations this summer compared to 2024.

Deloitte found travelers looking to save were cutting back on in-destination spending as well as opting for more affordable lodging and flight classes.

The survey also found that while some are being more frugal, many Americans are prioritizing bucket list trips and international travel, or trips that are otherwise special in some way.

Deloitte found 42% of air travelers were flying internationally on their longest summer trip, compared to 38% in 2024. Those traveling internationally were also more likely to increase their travel budget compared to last year.

Shim, the copywriter from Denver, also has a special reason for making her Portugal trip work this year, despite her financial concerns. Her family has been going through a tough time after her grandfather's death last year. This vacation is a way to spend quality time with and treat her mom, who has never been to Europe, and take the first trip that's just the two of them.

"I also think that sometimes in these times of uncertainty and tumultuousness and a lot of tension and division, traveling and spending quality time with family who loves you is a great way to just take care of your mental and emotional health too," she said, "which I think is also very important to do."

Do you have a story to share about your summer travel plans? Contact this reporter at [email protected].

• President Donald Trump may have other routes to impose tariffs if the court strikes down his current duties.
• A pause on Trump's use of the IEEPA to impose tariffs has been halted by an appeals court.
• International trade experts say other ways to hike tariffs may be limiting and time-consuming.

President Donald Trump has four more swings at implementing his tariffs — even if courts strike down his use of the IEEPA.

Experts in international trade told Business Insider that Trump could take four different routes to imposing trade barriers without Congress. All four are doable, though significantly more complicated, and are unlikely policies he could change at will overnight.

"Now we're over a hundred days into the tariffs, and tariffs are a very top-of-the-agenda item," Drew DeLong, lead in geopolitical dynamics practice at Kearney, a global strategy and management consulting firm, told BI.

"There are a number of motivations underneath tariffs, and whether his current tariffs stay, he will find ways to continue to amplify pressure on trading partners," DeLong added.

After small businesses sued Trump and his various trade officials over tariffs, the US Court of International Trade ruled unanimously on May 28 that he doesn't have the authority to levy sweeping tariffs using the IEEPA — a 1970s law typically used for economic sanctions during national emergencies.

The Court of Appeals for the Federal Circuit resumed the tariffs a day later, but their fate remains uncertain.

"That decision, if it is favorable to Trump, would still go to the Supreme Court for review," said Kent Jones, Professor Emeritus of international economics at Babson College. "Many conservative judges, even Trump appointees, have tended to view Trump's use of IEEAP as overstepping the limits of delegating tariff-making power from Congress to the President."

Here are four things the Trump administration could do next to keep trade barriers up without Congress.

Section 122

DeLong said Section 122 of the Trade Act of 1974, also known as the Balance of Payments Act, could be the White House's first choice if it wants to "continue the pressure immediately" on trading partners.

The act's official language allows it to be applied only if there are "large and serious United States balance-of-payments deficits," otherwise known as trade deficits.

"Section 122 is probably going to be a top pick," Robert Shapiro, an attorney of international trade at Thompson Coburn LLP, told BI. "That gives Trump some vehicle, but it's a limited 15% for 150 days, and then he has to go to Congress."

"That would open the door for Congress to pass a whole bunch of trade actions, but the administration obviously didn't want to go through that first," Shapiro added.

Section 232

Section 232 under the Trade Expansion Act of 1962 allows the White House to raise duties on imports it deems a threat to national security.

A recent probe into critical mineral imports, for example, argued that the US is overly dependent on foreign sources for materials essential to defense, infrastructure, and innovation.

DeLong said that at the moment, there are at least eight ongoing Section 232 investigations, including those involving copper, timber, and semiconductors. He said the recent June 3 tariff hike on steel and aluminum from 25% to 50% is also being done under section 232.

Jones said, however, that each section 232 tariff requires a formal investigation, and the sectors it could be applied to are limited.

"The problem with section 232 is that it requires a separate action for each industrial category of goods against which tariffs can be imposed," said Jones. "The perceived advantage of the IEEPA was that it allowed broad tariff coverage across the board to all industries."

Section 301

Section 301 of the Trade Act of 1974 gives the US Trade Representative — now Jamieson Greer — broad authority to investigate whether other countries are violating existing trade agreements or hurting American businesses.

DeLong said that the first Trump administration leaned heavily on the provision to impose tariffs on hundreds of billions of dollars worth of Chinese goods and aircraft from the European Union.

But section 301 would require a formal investigation and even a public comment period.

"The problem with sec. 301, however, is that it requires a separate determination of specific foreign unfair or discriminatory trade practices, country by country," said Jones.

"The IEEPA, again, seemed to give the President more flexibility in declaring an emergency against all global imports into the US without the need to document specific foreign practices," Jones added.

Section 338

DeLong said Section 338 of the Tariff Act of 1930 could theoretically allow any US president to impose up to a 50% tariff on countries that discriminate against the US. However, he said this would be a very uncommon approach that could again bring the tariff argument into uncharted territories.

"That has not been used — and I don't think I'm understating this —in decades, or ever," said DeLong of section 338. "That would be relatively new."

• Protests over ICE raids in the Los Angeles area this weekend highlight the crackdown on undocumented workers at businesses and the overall impact of immigration, legal or otherwise, on the economy. The collapse in immigration represents a bigger negative supply shock than President Donald Trump’s tariffs do, Deutsche Bank said.

President Donald Trump’s mobilization of California National Guard troops to protect immigration officers from protesters highlights his crackdown on undocumented workers and the economic impact of a sudden drop in labor supply.

Protests in Los Angeles began on Friday, when armed federal agents clad in camouflage uniforms, tactical vests, and helmets arrived in armored vehicles to carry out a raid on a clothing wholesaler. It was the latest in a series of similar high-profile operations at businesses around the country.

Also on Friday, the Labor Department issued its monthly jobs report, which showed the U.S. workforce shrank in May as the number of foreign-born workers saw the biggest back-to-back declines since 2020. That comes after a surge in immigration during the Biden administration helped boost economic activity.

According to a Deutsche Bank analysis of data from U.S. Customs and Border Patrol, the number of encounters at the Southwest border has plunged to 12,000 people per month since Trump’s inauguration from an average of 200,000 during the more-than-two-year period between January 2022 and June 2024.

“While everyone is focused on the impact of tariffs, the real story for the U.S. economy is the collapse in immigration: down more than 90% compared to the run rate of previous years, equivalent to a slowing in labour force growth of more than 2 million people,” George Saravelos, head of FX research at Deutsche Bank, wrote in a note on Friday. “This represents a far more sustained negative supply shock for the economy than tariffs.”

While Trump has pointed to weaker payroll growth as reasons for the Federal Reserve to cut interest rates, his immigration crackdown gives the central bank, which is already wary of the inflationary effect of his tariffs, another reason to wait and see.

That’s because a workforce that is growing more slowly doesn’t need as much hiring to absorb the additional labor supply. In fact, even as average payroll gains have cooled to 124,000 a month this year from 250,000 in 2024, the jobless rate has hovered around 4.2% since last summer.

Wall Street sees a lower break-even rate for job growth, or the amount of hiring needed to keep the unemployment rate steady. By the end of this year, that pace should fall to 90,000 per month from 170,000 now and 210,000 last year, according to Morgan Stanley, which cited deportations and slower immigration.

Deutsche Bank warned the collapse of immigration will have broader implications in financial markets, including for the dollar, which has already been battered by Trump’s aggressive tariff campaign.

“Last year we were writing that the U.S. was benefiting from a goldilocks mix of high employment growth and low wages precisely because of high immigration numbers,” Saravelos said. “If recent immigration trends continue, it must follow that over the course of the year the reverse will happen. As the 2022 energy shock showed, a negative supply shock is not good news for a currency.”

This story was originally featured on Fortune.com

US negotiators will aim to restore the flow of critical minerals when they meet their Chinese counterparts for a new round of trade negotiations Monday in London, a top economic aide to President Donald Trump said. 

“Those exports of critical minerals have been getting released at a rate that is, you know, higher than it was but not as high as we believe we agreed to in Geneva,” Kevin Hassett, director of the National Economic Council, said Sunday during an interview on CBS News’ Face the Nation with Margaret Brennan. 

Rare earth flows became a new flashpoint in the testy bilateral relations in recent weeks. Top US officials including Trade Representative Jamieson Greer accused Beijing of failing to comply with the elements of the trade agreement brokered last month in Geneva by slowing down and choking off critical minerals needed for cutting-edge electronics.  

Trump on Friday described talks with China as “very far advanced” and said that Xi Jinping agreed to speed shipments of the critical rare-earth minerals. China said on Saturday it approved some applications for rare earth exports but didn’t elaborate on the products’ applications or destinations.

“I’m very comfortable that this deal is about to be closed,” Hassett told CBS, without elaborating on the exact terms to be negotiated by the two sides during the London talks. 

“We want the rare earths, the magnets that are crucial for cellphones and everything else, to flow just as they did before the beginning of April,” he said. “We don’t want any technical details slowing that down.”  

This story was originally featured on Fortune.com

U.S.-China trade talks in London this week are expected to take up a series of fresh disputes that have buffeted relations, threatening a fragile truce over tariffs.

Both sides agreed in Geneva last month 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 then, the U.S. and China have exchanged angry words over advanced semiconductors that power artificial intelligence, “rare earths” that are vital to carmakers and other industries, and visas for Chinese students at American universities.

President Donald 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 next day that trade talks would be held on Monday in London.

Technology is a major sticking point

The latest frictions began just a day after the May 12 announcement of the Geneva agreement to “pause” tariffs for 90 days.

The U.S. Commerce Department issued guidance saying the use of Ascend AI chips from Huawei, a leading Chinese tech company, could violate U.S. export controls. That’s because the chips were likely developed with American technology despite restrictions on its export to China, the guidance said.

The Chinese government wasn’t pleased. One of its biggest beefs in recent years has been over U.S. moves to limit the access of Chinese companies to technology, and in particular to equipment and processes needed to produce the most advanced semiconductors.

“The Chinese side urges the U.S. side to immediately correct its erroneous practices,” a Commerce Ministry spokesperson said.

U.S. Commerce Secretary Howard Lutnick wasn’t in Geneva but will join the talks in London. Analysts say that suggests at least a willingness on the U.S. side to hear out China’s concerns on export controls.

China shows signs of easing up on rare earths

One area where China holds the upper hand is in the mining and processing of rare earths. They are crucial for not only autos but also a range of other products from robots to military equipment.

The Chinese government started requiring producers to obtain a license to export seven rare earth elements in April. Resulting shortages sent automakers worldwide into a tizzy. As stockpiles ran down, some worried they would have to halt production.

Trump, without mentioning rare earths specifically, took to social media to attack China.

“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted on May 30.

The Chinese government indicated Saturday that it is addressing the concerns, which have come from European companies as well. A Commerce Ministry statement said it had granted some approvals and “will continue to strengthen the approval of applications that comply with regulations.”

The scramble to resolve the rare earth issue shows that China has a strong card to play if it wants to strike back against tariffs or other measures.

Plan to revoke student visas adds to tensions

Student visas don’t normally figure in trade talks, but a U.S. announcement that it would begin revoking the visas of some Chinese students has emerged as another thorn in the relationship.

China’s Commerce Ministry raised the issue when asked last week about the accusation that it had violated the consensus reached in Geneva.

It replied that the U.S. had undermined the agreement by issuing export control guidelines for AI chips, stopping the sale of chip design software to China and saying it would revoke Chinese student visas.

“The United States has unilaterally provoked new economic and trade frictions,” the ministry said in a statement posted on its website.

U.S. Secretary of State Marco Rubio said in a May 28 statement that the United States would “aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields.”

More than 270,000 Chinese students studied in the U.S. in the 2023-24 academic year.

This story was originally featured on Fortune.com

• Despite a housing market that continues to price out many young Americans, members of Gen Z are digging deep to find ways to afford their dreams of homeownership. According to a Bank of America Institute survey, more Gen Zers are taking on extra jobs or teaming up with siblings to buy homes.

Young Americans are not letting an unaffordable housing market prevent them from purchasing their own homes.

According to a recent Bank of America Institute survey, more Gen Zers are getting help from outside the Bank of Mom and Dad, which has long been a mainstay in the finances of young adults.

“Despite financial hurdles, the dream of homeownership remains a powerful motivator for Gen Z and Millennials, who are making sacrifices in the present to prioritize the long-term financial security a home can provide,” BofA’s annual Homebuyer Insights Report said.

It found that 30% of Gen Z homeowners paid for their down payment by taking on an extra job, up from 28% in 2024 and 24% in 2023.

The survey also revealed a sharp increase in another financial resource: 22% of Gen Z homeowners bought their home with siblings, surging from 12% in 2024 and just 4% in 2023.

That tracks similar data about co-ownership. According to a 2024 survey by JW Surety Bonds, nearly 15% of all Americans have co-purchased a home with a person other than their romantic partner.

But Americans seem to prefer staying within the family. A Redfin study last year found that more than a third of millennials and Gen Zers who are planning to buy a home expect their parents or family to help with their down payment. 

According to BofA’s recent report, 21% of prospective Gen Z buyers said they plan to rely on family loans for a down payment, compared to 15% of survey respondents overall.

“Even with the challenges they face, younger generations still understand the long-term value owning a home offers them and many are doing what it takes to get there,” Matt Vernon, BofA’s head of consumer lending, said in the report, which came out May 28. “They are finding creative ways to afford down payments and working hard to improve their financial futures.”

That’s as the homeownership rate for Americans younger than 35 dipped to just 36.3% in the fourth quarter of 2024, the lowest since early 2019, though it edged up to 36.% in the first quarter of 2025, according to data from the U.S. Census Bureau.

Meanwhile, the BofA study found that among survey respondents overall, the housing market—which has largely remained frozen by high mortgage rates and home prices—is a puzzle.

Sixty percent of current homeowners and prospective buyers said they can’t tell whether it’s a good time to buy a home or not, versus 57% last year and 48% in 2023.

Still, a larger share of prospective buyers think the market is better now than a year ago and are holding off on buying as they expect mortgage rates and home prices to fall later.

“They may be waiting for the right moment, but they’re not standing still,” Vernon said. “They’re building credit, saving for down payments, and paying attention to the market so they can buy when the time is right for them.”

In fact, a key tipping point in the housing market is coming into view as momentum shifts more firmly in favor of buyers over sellers.

Home-sale prices in 11 of the 50 biggest U.S. metro areas are already falling, according to data from Redfin, ahead of a broader decline later this year.

Redfin sees the median U.S. sale price going flat in the third quarter on an annual basis, then falling 1% year over year by the fourth quarter.

That follows a similar forecast from Zillow in April, when it predicted home values will fall 1.9% this year after previously anticipating a 0.6% increase. 

“The combination of rising available listings and elevated mortgage rates is signaling potential price drops by year’s end,” Zillow researchers wrote. “With increased supply, buyers are gaining more options and time to decide, while sellers are cutting prices at record levels to attract bids.”

This story was originally featured on Fortune.com

Beijing says it granted approval to some applications for the export of rare earths, a move that could ease tensions before trade negotiations between the US and China next week. 

The Chinese commerce ministry confirmed the approval of the applications without specifying which countries or industries were covered, even as it noted growing demand for the minerals in robotics and electric vehicles. The ministry will continue to review and approve compliant export applications, according to a statement on Saturday. 

The confirmation comes days after the US and Chinese presidents spoke, following which Donald Trump said that there “should no longer be any questions respecting the complexity of Rare Earth products.” Delegations from Beijing and Washington are scheduled to meet in the UK to conduct trade negotiations on Monday. 

China granted temporary export licenses to rare-earth suppliers of the top three US automakers, Reuters reported on Friday. The commerce ministry also said earlier Saturday it will speed up approvals for qualified rare earth exporters to Europe. 

This story was originally featured on Fortune.com

• Elon Musk predicted Trump's tariffs will trigger a recession later this year.
• Musk's comment comes amid a growing public fallout with the president.
• Wall Street has expressed similar concerns over Trump's tariffs.

Elon Musk predicted Donald Trump's tariffs will send the economy into recession, one of many verbal barbs the tech billionaire threw at the president on Thursday as their relationship collapsed into acrimony.

"The Trump tariffs will cause a recession in the second half of this year," Musk wrote on X while reposting another tweet that called Trump's tariffs "super stupid."

The morning began with Trump saying he was disappointed by Musk's opposition to his "One Big Beautiful Bill" during a press appearance to welcome the German Chancellor to the White House.

The feud intensified when Musk called out Trump's "ingratitude," and suggested establishing a new political party. The SpaceX cofounder also proposed decommissioning the company's Dragon spacecraft after Trump threatened to cut his government contracts, although Musk backed off that idea pretty quickly on X.

Fractures between the two emerged after Musk left his role recently at the White House. On Tuesday, Musk blasted the Republicans' tax-and-spending-cut bill, which Trump helped to shepherd through the House, calling it "pork-filled'" and a "disgusting abomination."

Musk isn't alone in criticizing the potential fiscal impact of this legislation. The nonpartisan Congressional Budget Office estimated it could increase deficits by $2.4 trillion over a decade.

Other experts also agree with Musk that Trump's tariffs could have a negative impact on the US economy.

JPMorgan predicted a 60% chance of a US recession after Trump imposed sweeping tariffs on April 2. The bank adjusted the possibility down to below 50% recently after Trump paused most of his highest tariffs.

In a March interview with Fox News, Trump had also declined to rule out the possibility of a recession.

"I hate to predict things like that," said Trump.

"There is a period of transition," he added, "because what we're doing is very big. We're bringing back wealth to America. That's a big thing, and there are always periods of, it takes a little time, it takes a little time."

• The Education Department confirmed to BI that it's pausing Social Security garnishment for defaulted student loans.
• The department said it plans to resume offsets "sometime this summer."
• It is also still planning to garnish wages for defaulted borrowers this summer.

President Donald Trump is pausing one of the harshest consequences for student-loan borrowers who default on their debt.

On Monday evening, the Department of Education confirmed to Business Insider that it would be pausing Social Security garnishment for defaulted student-loan borrowers after restarting collections on May 5.

"The Department has not offset any social security benefits since restarting collections on May 5, and has put a pause on any future social security offsets," Ellen Keast, an Education Department spokesperson, told BI.

"The Trump Administration is committed to protecting social security recipients who oftentimes rely on a fixed income," Keast continued. "In the coming weeks, the Department will begin proactive outreach to recipients about affordable loan repayment options and help them back into good standing."

A notice posted to the Department of Education's debt resolution page also said that the department is "delaying offsets of these monthly benefits for a couple of months and plans to resume sometime this summer."

The notice added that the department still intends to resume wage garnishment "later this summer."

This announcement comes after a five-year pause that Trump started during the pandemic, halting negative credit reporting and collections on defaulted student loans. Linda McMahon, Trump's education secretary, said that collections would resume once again in an effort to restore accountability to the student-loan system.

"Borrowing money and failing to pay it back isn't a victimless offense. Debt doesn't go away; it gets transferred to others," McMahon wrote in a May opinion piece.

A federal borrower typically enters default after missing payments for more than 270 days. Those who are in default can rehabilitate their loans or consolidate their loans — both of which can be time-consuming — or file for bankruptcy.

Over 5 million borrowers are currently in default. The New York Federal Reserve recently found that the number of borrowers who moved into serious delinquency surged to 8.04% in the first quarter of 2024, meaning that millions more could enter default this summer.

Some student-loan borrowers previously told BI that they cannot afford to lose their Social Security income if they default on their debt.

"There will be no retirement. I'll die on the job," James Southern, a 63-year-old borrower, said. "Even if I were at my full retirement age, they'd garnish the Social Security, so I'm still going to have to work in order to survive."

Are you in default, or concerned about defaulting on your student loans? Share your story with this reporter at [email protected].

• The OECD cut its forecast for US economic growth in 2025 from 2.8% to 1.6%.
• It cited President Donald Trump's tariffs, which had pushed the US import rate to the highest level since 1938.
• Global growth is also set to slow as trade tensions disrupt investment and inflation rises, the OECD said.

The US and global economy are losing steam, and a key forecaster said President Donald Trump's trade tariffs were part of the reason.

In its latest Economic Outlook, released on Tuesday, the Paris-based Organization for Economic Co-operation and Development cut its forecast for US economic growth in 2025, pointing to the fallout from the administration's trade policies. The 2.8% rate it predicted in March has now been reduced to 1.6%.

The OECD warned that these tariffs, which have pushed the effective US import rate to 15.4% — the highest since 1938 — were not only affecting US growth but reverberating across the global economy too.

Global growth was now projected to slow to 2.9% in both 2025 and 2026, down from 3.3% in 2024.

The OECD said the slowdown in growth was concentrated in the US, Canada, Mexico, and China. Growth in China, the world's second-largest economy, was expected to fall to 4.7% in 2025, down from 5% last year, and come in at 4.3% in 2026.

As of May 27, a blanket 10% tariff applies to all goods imported into the US, with some limited exemptions.

Stoking inflation

A 50% tariff on imports from the European Union were paused until July 7 amid "fast-tracked" negotiations, while steep levies on imports from China have also been put on hold.

The OECD said these policies were eroding investment, disrupting supply chains, and stoking inflation — especially in the US, where price growth is now projected to approach 4% by the end of the year.

OECD secretary-general Mathias Cormann said governments needed to work to keep markets open and preserve the "economic benefits of rules-based global trade for competition, innovation, productivity, efficiency and ultimately growth."

Chief economist Álvaro Pereira added: "Lower growth and less trade will hit incomes and slow job growth."

The organization urged governments to de-escalate tensions and roll back tariffs to avoid further damage to the global economy.

In a Monday note, Deutsche Bank economists said there were global signs of a "turbulent but sustained path toward trade de-escalation. The fallout from the US 'Liberation Day' policies — from falling approval ratings to a sell-off in US government bonds — forced a rethink in Washington. While recent court rulings could pave the way for an even more benign trade regime, they also prolong uncertainty."

The bank also expected US GDP to grow by 1.6% this year and by 1.7% in 2026 on an annual average basis.

• Wells Fargo said in a report that President Donald Trump's tariffs won't bring manufacturing back.
• High labor costs and a lack of workers would make building more factories an "uphill battle."
• US manufacturing needs $2.9 trillion in investment to reach 1979 employment levels.

President Donald Trump's push to revive American manufacturing through tariffs may face some hurdles.

Despite some high-profile commitments, including Nvidia's plans for a US-based supercomputer plant and Apple's pledge to invest $500 billion domestically, a new report from Wells Fargo economists predicts that bringing back offshored manufacturing jobs will be an "uphill battle."

"An aim of tariffs is to spur a durable rebound in US manufacturing employment," Wells Fargo analysts wrote in the report. "However, a meaningful increase in factory jobs does not appear likely in the foreseeable future, in our view."

The report attributes the potentially low factory job growth to high labor costs, a lack of suitable workers to fill vacant positions, and a subdued population growth from lower fertility rates and slower immigration.

"Higher prices and policy uncertainty may weigh on firms' ability and willingness to expand payrolls," the analysts added.

The tariffs are part of Trump's broader economic agenda to revive American manufacturing as a pathway toward middle-class prosperity. The tariffs are meant to hike the costs of imports to incentivize companies to make goods domestically.

"Jobs and factories will come roaring back into our country," Trump said while announcing tariffs on April 2. "And ultimately, more production at home will mean stronger competition and lower prices for consumers."

Some tariffs imposed on April 2 have been temporarily paused or greatly reduced, including tariffs on China. The 10% across-the-board tariff remains, as do some specific tariffs on Mexico and Canada, plus 30% in duties on China. Duties at their current level are still the highest they have been since the 1940s.

"In order for manufacturing employment to return to its historic peak, we estimate at a minimum $2.9 trillion in net new capital investment is required," Wells Fargo analysts wrote. "Assuming businesses are willing and able to invest such ample sums, questions over staffing remain."

The Wall Street bank says that US manufacturing employment currently stands at 12.8 million, down from its 1979 peak of 19.5 million. To get back to that mark, the US would need to add roughly 6.7 million jobs. Wells Fargo added that the figure is nearly the same as the entire pool of unemployed Americans, which in April was 7.2 million, according to the US Bureau of Labor Statistics.

"Population aging, negative perceptions, and skill mismatches also underpin workforce concerns," Wells Fargo analysts wrote. "New jobs will require different skills than those previously lost."

In 2024, Taiwanese chipmaker TSMC said it delayed the opening of its Arizona chip factory due to a shortage of skilled workers. A report released in April 2024 by Deloitte and the Manufacturing Institute also found that nearly half of the 3.8 million new manufacturing jobs anticipated by 2033 could remain unfilled due to skill gaps and other population factors.

"Tariffs must be high enough to make the cost of domestic production competitive in the US market, and they also must be kept in place long enough for producers to bring on additional workers and expand capacity," the report concluded. "If the economic or political costs are deemed too high, the current administration could quickly dial-back prevailing duties further."

The White House did not immediately respond to a request for comments.

• Airbnb's CEO said he's heard from founders facing a challenging fundraising landscape amid economic uncertainty.
• Brian Chesky said that while a stable economy is needed, there's a "silver lining" to building a business in tough times.
• The Airbnb cofounder said on Michelle Obama's podcast that a tough economy bakes "discipline" into your company culture.

Brian Chesky is no stranger to starting a business in tough economic times.

Chesky cofounded Airbnb in 2007 and built the business during the 2008 financial crisis. In a recent podcast conversation with Michelle Obama and her brother, Craig Robinson, Chesky said it was challenging to get the business off the ground during a recession, even with some of the advantages and connects he and his founders had that other entrepreneurs might not have.

However, he said there was one "silver lining" to growing the business during tough times, which might resonate with founders facing today's economic uncertainty.

"A lot of great companies have been started in a recession," he said in a Wednesday episode of "IMO with Michelle Obama & Craig Robinson."

"And the one, I don't want to say it's a good thing, but what it does is it teaches you a certain type of discipline," he said. "A tough economy teaches you a discipline that gets institutionalized into your culture."

By comparison, a strong economy might give founders more cushioning to "perpetuate bad strategies and be a little less disciplined," Chesky said.

"I think the good news is a lot of great entrepreneurs are incredibly resourceful, and they will find a way to work," the Airbnb cofounder said. "But we absolutely need like a very stable economy."

Chesky said that entrepreneurs he's spoken with recently told him "a lot of fundraising, for all intents and purposes, was kind of on hold."

"A lot of limited partners and investors are just like hunkering down. And what we know about investors, they don't like uncertainty," he said.

He believes investors will "sit this one out until things stabilize."

"And if they don't stabilize, we're going to be in for a very prolonged kind of dry spell for fundraising," he said. "If you did not go to a prestigious school, if you weren't, like, purely a team of technical engineers, if you're not trying to create an AI company, you're just trying to create a business, that will be more difficult."

Airbnb isn't the only successful business to emerge from the Great Recession. Companies like Uber, WhatsApp, Venmo, and Square also started around the time of the 2008 financial crisis.

"It's always a great time to start a business — and some of the most successful businesses are started during recessions," certified financial planner Cary Carbonaro previously told BI. "Adversity is the mother of invention."