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Oct. 27 (UPI) — The Federal Reserve will meet Wednesday, as the U.S. government shutdown enters its fifth week, to decide whether to cut interest rates for a second time since September.

Last week, the Labor Department released its Consumer Price Index, showing inflation rose at a rate of 3% last month. While inflation remains above the Federal Reserve’s 2% target, many economists expect a rate cut this week.

“Concerns about tariffs driving prices higher are still not showing up in most categories,” Scott Helfstein, Global X’s head of investment strategy, told CBS News on Friday. “Nothing in the inflation print should stop the Fed from cutting rates next week. Yes, prices are higher, but not enough to keep them from helping the economy.”

While some economic data has not been released amid the government shutdown, forcing the Federal Reserve to make its decision without some key information, a quarter-point cut to benchmark federal funds this week would lower the target to somewhere between 3.75% and 4%.

“This time around, there are warning signs all around the economy, from rising unemployment to seven straight months of contraction in manufacturing due to tariffs,” Ryan Young, senior economist at the Competitive Enterprise Institute, told Fox Business. “That is what is pushing Fed officials towards cutting rates. But that stimulus comes with a tradeoff: it risks higher inflation. They’re taking a chance, and it might not pay off.”

Last month, Federal Reserve chairman Jerome Powell announced a 0.25% rate cut, the first of President Donald Trump‘s second term and the first since the United States imposed wide-ranging tariffs. The Federal Reserve works to control inflation, while maximizing job growth.

U.S. markets, which closed higher Monday, are also expecting another rate cut this week, along with a third in December.

The Dow Jones Industrial Average and the S&P 500 are currently sitting at record highs. On Friday, the Dow closed for the first time above 47,000, buoyed by the expectation of another rate cut this week, as well as big tech earnings reports and a possible China trade deal.

Global markets were buoyed on Monday morning by expectations of another Fed rate cut and growing optimism that the US and China are moving closer to a trade deal, following comments from President Donald Trump.

The optimism wiped out gains in safe-haven assets such as gold futures and boosted stock exchanges across the globe.

Yet, leading European benchmark indexes opened mostly flat, except for Milan’s FTSE MIB, which was up by 0.61%. Madrid IBEX 35 also gained 0.37% by around 11:00 CEST.

At the same time, European benchmark STOXX 600, as well as the FTSE 100 in London, remained nearly flat. The DAX in Frankfurt gained 0.15% while Paris’ CAC 40 lost less than 0.1%. This came after credit rating agency Moody’s changed France’s outlook from stable to negative on Friday.

Investors in Europe are closely watching for signs of economic health, with one of the strongest indicators — the first reading of the eurozone’s third-quarter GDP — due on Thursday.

On the same day, the European Central Bank (ECB) is scheduled to hold its monetary policy meeting. Given that inflation in the bloc has remained around the bank’s 2% target, the ECB is expected to hold interest rates steady this week for its third straight meeting. The key deposit rate has been at 2% since June.

US-China relations

Across the globe on Monday, US futures were mostly up in pre-market trading. This came as Asian shares rallied too, with Japan’s benchmark Nikkei 225 topping 50,000 for the first time.

Later this week, the US President has a scheduled meeting with the Chinese leader Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum (known as APEC), to discuss the trade deal between the world’s two strongest economies.

US and Chinese officials confirmed on Sunday that they had reached an initial consensus for Trump and President Xi Jinping to finalise during a meeting later in the week.

“I have a lot of respect for President Xi,” Trump told reporters after visiting Malaysia for a summit of Southeast Asian nations, where he reached preliminary trade agreements with Malaysia, Thailand, Cambodia, and Vietnam.

“I think we’re going to come away with a deal,” Trump said.

And investors see it as a strong signal. According to Stephen Innes of SPI Asset Management: “This isn’t just photo-op diplomacy. Behind the showmanship, Washington and Beijing’s top trade lieutenants have quietly mapped out a framework that might, just might, keep the world’s two largest economies from tearing up the field again.”

The enthusiasm brought about a shift in risk-taking among investors, demonstrated by a fall in gold futures. The safe-haven asset’s continuous contract fell by almost 2% on Monday morning, as an ounce was priced at $4,055.50.

The euro and Japanese yen remained flat against the US dollar. One euro was traded at $1.1638, while the greenback cost ¥152.8070. The British pound climbed 0.26% against the US dollar, and the rate was at $1.3345.

Crude oil prices fell after European markets opened, with both benchmarks trading nearly 1% lower. The US benchmark WTI crude’s price was $61.06 a barrel, and Brent was at $65.47.

In other dealings, leading cryptocurrencies were up. CoinDesk’s Bitcoin Price Index (XBX) gained 4.86% and climbed to $115,395.34. Ethereum cost $4,171.84, up by 4.82% on Monday morning in Europe.

Another Fed rate cut on the cards, coupled with Big Tech reports

Wall Street hit record highs on Friday, after lower-than-expected inflation numbers from the US fuelled further hope that the Federal Reserve is about to cut interest rates further this Wednesday.

The data on inflation was encouraging because it could mean less pain for lower- and middle-income households struggling with still-high increases in prices. Even more importantly for Wall Street, it could also clear the way for the Federal Reserve to keep cutting interest rates in hopes of giving a boost to the slowing job market.

The Fed just cut its main interest rate last month for the first time this year, but it’s been hesitant to promise more relief because lower rates can make inflation worse, beyond boosting the economy and prices for investments.

Meanwhile, a flood of big tech companies’ earnings is on its way this week, with Microsoft, Meta and Google-parent Alphabet reporting on Wednesday. Apple and Amazon’s numbers are due to be released on Thursday.

Better-than-expected profits could fuel hopes for steady growth in the US. Information is scarce about the current state of the world’s biggest economy due to the prolonged government shutdown.

The Federal Reserve just cut interest rates. The goal was, basically, to protect the U.S. economy from falling into a recession.

Wall Street is expecting additional rate cuts from here, which could lead to positive outcomes for these three consumer goods companies. Each one comes with a different set of risks and potential rewards. Here’s why these stocks could be worth examining today, before more rate cuts are made.

Image source: Getty Images.

1. Target isn’t resonating with consumers right now

Target (TGT) is a large big box retailer, offering a range of products under one roof. It competes directly with Walmart (WMT 0.64%). That’s an important comparison point because Target is doing poorly right now and Walmart is doing quite well. To put numbers on that, Target’s same-store sales fell 1.9% in the second quarter of 2025 while Walmart’s same store sales rose 4.6% in its U.S. locations.

The big difference is that Target’s business model is to offer a more premium experience, while Walmart is squarely about its everyday low prices ethos. Consumers worried about the economy and inflation, which The Motley Fool’s research shows can ravage the buying power of the dollar, appear to be voting with their feet. However, if Federal Reserve rate cuts lead to a growth uptick, consumers could trade back up to Target.

Just such a shift has happened before, so expecting it to happen again isn’t a big stretch in a sector driven by consumer sentiment. That said, Target’s shares are down more than 40% from their 52-week high, making them look relatively cheap. And the Dividend King is offering an attractive 5% yield that’s backed by over five decades of annual dividend increases.

2. Lululemon is a luxury basics clothing retailer

The story around Lululemon (LULU -0.75%) is roughly similar to that of Target. Lululemon makes athletic wear basics. However, the cost of these basics is very high, so it is really a luxury retailer. To be fair, there’s a fashion twist here and the company has made past design missteps that can’t be ignored. But overall, it has been on trend more than it has been off trend.

But one thing Lululemon can’t control is the swings in the economy and how customers react to those swings. The company’s second quarter results weren’t bad if you take a top-level view of the income statement, with revenues up 7% and same-store sales up 1%. But that was entirely driven by international growth, with sales up just 1% in the Americas and same store sales off by 4%.

It clearly looks like consumers in the Americas are pulling back on what are really discretionary purchases, despite the basic nature of the items. If rate cuts make consumers more confident in the economy again, that trend could change. With the stock down more than 50% from its 52-week high, there could be some turnaround appeal here for more aggressive investors.

3. Coca-Cola is boring and doing fairly well

Coca-Cola (KO -0.83%), the last stock up on this list, is appropriate for conservative investors. The shares are only down around 10% from their 52-week highs. But that’s enough to have pushed the stock’s price-to-sales and price-to-earnings ratios below their five-year averages. It wouldn’t be fair to suggest that Coca-Cola is trading hands at fire-sale prices, but it does appear fairly priced to a little cheap. The stock doesn’t go on sale very often, so this could be a good opportunity for long-term investors who place a high value on dividends.

On the dividend front, the beverage giant is a Dividend King with over six decades of annual dividend increases behind it. The yield is notably above the market at nearly 3.1%. And it is one of the largest and best-run consumer staples companies on the planet. If you are risk averse, Coca-Cola is a solid option. And economic growth driven by rate cuts could make it that much easier for consumers to justify splurging on what is basically very expensive water.

There’s plenty of benefit to go around from rate cuts

Federal Reserve rate cuts are a bit of a blunt instrument when it comes to impacting the economy. But they can be very effective at freeing up capital for investment. If there are more rate cuts to come, as Wall Street seems to expect, Target, Lululemon, and Coca-Cola could all benefit if the outcome is continued, if not stronger, economic growth. The upside at Target and Lululemon is more material, but Coca-Cola shows that even the most conservative investors can get in on the rate-cut investment opportunity.

Stocks are at an all-time high, as there have been plenty of winners during the AI boom.

However, one sector has been left behind over the last couple of years. Housing stocks have generally been reeling with mortgage rates still elevated and existing home sales down roughly 30% since pre-pandemic levels. That has impacted everyone in the sector, from home builders to real estate agencies to home-furnishing companies, which depend on home sales to drive demand.

One company, RH (RH -3.60%), is still trading down 69% from its pandemic-era peak, as its business pulled back substantially in the post-pandemic era, even though it has since regrouped and is back to delivering solid growth.

The stock pulled back last week after the high-end home furnishings company formerly known as Restoration Hardware missed estimates and cut its full-year guidance. The stock fell 4.6% on the news, even though the numbers were solid considering the challenging macroeconomic environment.

Image source: RH.

Revenue rose 8.4% to $899.2 million, below estimates for $905.4 million. Demand, which is a measure of order growth, was up 13.7% in the period, even with the impact of tariff uncertainty and a weak housing market.

Despite the weaker-than-expected revenue growth, the company continued to deliver strong profit margins with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 20.6%, and a generally accepted accounting principles (GAAP) operating margin of 14.3%.

Adjusted earnings per share jumped from $1.69 to $2.93, showing its margins are rapidly expanding, though that missed the consensus at $3.22.

Why RH could soar

It will take a lot for RH to recover to its previous peak, which came at a time when the housing market was soaring and home-improvement stocks were delivering rapid growth.

However, considering it’s down 69% from its peak, RH doesn’t need to get all the way back there to be a winner. In fact, the Fed rate cut on Wednesday could be the trigger the company needs in the housing market.

CEO Gary Friedman hasn’t hesitated to blame what he’s called the weakest housing market in 30 years for the company’s woes, and lower mortgage rates are likely to bring more home buyers and sellers into the market. Lower rates will reduce monthly payments, and it will also encourage sellers to reenter the market as it will diminish the “lock-in effect” of the pandemic era.

As a high-end home furnishings seller, RH is well prepared to take advantage of the housing market recovery as home sales tend to trigger new furniture purchases.

The company has also expanded significantly in Europe and with new galleries in the U.S., in addition to new trial businesses like restaurants, guesthouses, and airplane and yacht charters.

While interest rate cuts in the U.S. won’t directly affect the business in Europe, its expansion across the pond shows there’s plenty of growth runway left for the company.

Is RH a buy?

Based on analyst estimates for fiscal 2027, which ends in January 2027, RH stock trades at a forward P/E of 18, which seems like a fair price for a stock that still has significant growth potential. Additionally, Friedman envisions expanding the brand beyond home furnishings, even flipping whole, fully furnished houses, effectively getting into the housing market, a program it calls RH Residences.

Even if mortgage rates decline, it could take time for the housing market to spring back to life, especially as the lock-in effect is likely to persist for at least some homeowners.

However, investing in RH looks like a good way to take advantage of the expected rate cuts. For risk-tolerant investors, getting some exposure to the stock right now looks like a smart idea.

Families in Taiwan will receive cash incentives for newborns and fertility treatment.

Taiwan has announced that it is fighting back against low population growth with a new subsidy programme to encourage families to have more children.

Taiwan’s cabinet on Thursday approved standardised cash payouts to families for each newborn and the coverage of a larger proportion of infertility treatment costs, Focus Taiwan reported.

Under the new plan, families will receive $3,320 per newborn, Taiwan News reported, with twins qualifying for a payment of nearly $7,000. The previous system included payouts that ranged from $1,300 to $2,300 per baby, depending on the mother’s employment status.

Taiwan became a “super-aged society” in 2025, meaning that more than 20 percent of its population is aged 65 or older. The island nation has one of the lowest birth rates in the world, CNN reported last year, with its total birth rate in 2022 hitting just .087.

Countries need to maintain a total fertility rate of 2.1 children per woman to hit what the French Institute for Demographic Studies calls “replacement level,” meaning the number of children a couple must have to replace themselves in the population.

Taiwan saw its ninth consecutive year of declining birth rates in 2024, according to Taiwan’s Ministry of the Interior.

The country’s benefits will also extend to couples facing infertility. Women aged 39 and under will reportedly be eligible to receive subsidies for up to six attempts at in vitro fertilization (IVF). Women between the ages of 39 and 45 will receive subsidies for their first three attempts.

Low-and middle-income households will be eligible to receive nearly $5,000 per attempt at IVF.

Minister without Portfolio Chen Shih-chung told Taiwan News the recently announced subsidies are expected to help more than 120,000 families.

Other countries in the region have experimented with the type of programme Taiwan is looking to implement. Parents in Hong Kong receive over $2,500 for each newborn, and parents in South Korea can receive over $2,200 once they’ve had two or more children, CNN reported.

Taiwan’s policy changes are expected to go into effect in January 2026.

Today is the day.

At 2 p.m. ET Wednesday, give or take a few minutes, the Federal Open Market Committee should decide on its next round of interest-rate changes. Presumably it will lower its target interest rate from the current range of 4.25% to 4.5%, to one of 4% to 4.25% — a quarter-point cut. Potentially, it could lower the interest rate by twice as much — 0.5%.

Either way, and assuming a cut of any size at all, this will be the first interest-rate cut by the Federal Reserve in the past nine months, the Fed having last cut rates (also by 0.25%) back on Dec. 18, 2024.

Image source: Getty Images.

Why might the Federal Reserve cut interest rates?

Economists seem pretty certain a rate cut of some size is in the offing. According to the latest inflation update here at The Motley Fool, inflation is still running hotter (2.9%) than the Fed’s target rate of 2% — which you might think would give the Fed some pause. That said, the jobs market is showing sufficient signs of weakness that the Fed is getting concerned — and inclined to roll the dice and risk a bit of extra inflation in hopes of goosing the jobs numbers higher.

In July, the U.S. Bureau of Labor Statistics (BLS) reported that only 73,000 net new jobs were created, which was below projections. Then came August’s number, which was an objectively horrible 22,000 net new jobs — less than one-third of what economists had predicted. And all of this came after May and June jobs numbers were revised downward by more than a quarter-million.

So the jobs market doesn’t look great, and that means the Fed probably will cut rates today. Now what does this mean for you, the individual investor?

What it means for investors

Believe it or not, bad news for the jobs market and worrisome trends in inflation are both generally interpreted as good news for the stock market — at least when a Fed interest-rate cut is on the table as a possible solution. This is because when the Fed lowers interest rates, it becomes cheaper to borrow, and cheaper to pay interest on debts, which can be a boon for companies not yet earning profits.

Which kinds of companies? Well, maybe I’m biased because I write a lot about nuclear stocks. But if you ask about companies that might benefit from debt getting a bit cheaper, the first to come to my mind are the handful working to develop a new generation of small modular (and micro) nuclear reactors (SMRs). In order from smallest to largest, these include Nano Nuclear Energy (NNE -2.67%), NuScale Power (SMR -4.70%), and Oklo (OKLO -2.77%).

Investors value these three companies very differently. Nano Nuclear is worth only $1.5 billion in market capitalization, versus NuScale with an implied market cap of $11.1 billion, and Oklo tipping the scales at a weighty $14.1 billion.

But in many respects, these three companies look similar. Neither Nano Nuclear nor Oklo has any revenue to speak of. NuScale, which does have some revenue (from technology licenses, not from actual sales of either reactors or nuclear energy), still did only $56 million in business over the last 12 months — enough to value the stock at nearly 200 times sales.

Lacking revenue, it stands to reason that all three of these nuclear energy stocks are also unprofitable. What worries me more than the losses based on generally accepted accounting principles (GAAP), though, is the fact that these companies must continue burning through their cash reserves as they work toward commercializing their technology. Any nuclear stock that runs out of cash before it starts generating positive free cash flow on its own is at risk of needing to sell shares, or take on debt, to raise the cash it needs.

It’s here that lower interest rates from the Fed could lend a helping hand.

Who benefits most from a Fed rate cut?

I expect NuScale Power to benefit more than the others from a rate cut today. With only $420 million in the bank and an annual cash burn rate of $95 million, NuScale’s on course to be the SMR stock that runs out of cash first — potentially before it reaches profitability in 2030 (according to analysts polled by S&P Global Market Intelligence).

In contrast, both Oklo (with $534 million in cash and a burn rate of $53 million per year) and Nano Nuclear (with $210 million and $23 million, respectively) already have enough cash laid up to keep themselves in business for roughly a decade.

Relatively speaking, they’re both in stronger financial positions than NuScale is — but for this very reason, I expect NuScale stock to benefit most from today’s Fed rate decision.

Sept. 17 (UPI) — The Federal Reserve on Wednesday is expected to announce fresh rate cuts in the wake of U.S. President Donald Trump‘s demands to do so amid ongoing tariff worries and its impact on the American economy.

The central bank has not lowered interest rates since December and the Federal Open Market Committee is widely expected to lower rates by a quarter percent at its next meeting around 2 p.m EDT. It comes in an ongoing feud with White House that’s infuriated the president as the bank has been targeted by the Trump administration as it seeks to consolidate greater federal control under the executive branch.

On Monday, Trump’s newly appointed member to the Federal Reserve Stephen Miran was confirmed by the GOP-controlled Senate in a 48-47 vote.

It’s been suggested that Miran will dissent from the anticipated Fed decision as the administration seeks a higher rate reduction.

The Fed opted to take a “wait and see” approach on rates as the economy shifted under the aggressive economic and tariff policies implemented by Trump.

Trump for months has been vocally critical of Fed Char Jerome Powell and the independent board in his demands to lower interest rates as the president has recently attempted to illegally remove Fed Governor Lisa Cook from her role.

Powell did not give clear indications of the FOMC’s plan for Wednesday in a speech at the end of August to the annual Economic Policy Symposium in Jackson Hole, Wyoming.

On Monday, Trump said in a social media post in all caps the FOMC “must cut interest rates, now, and bigger than (Powell) had in mind.”

“In terms of the Fed’s dual-mandate goals, the labor market remains near maximum employment, and inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs,” Powell said in Wyoming.

“At the same time, the balance of risks appears to be shifting,” he said on August 22.

But a Goldman Sachs economist said Tuesday the “key question” for the September FOMC meeting was whether it will “signal that this is likely the first in a series of conservative cuts.”

“We expect the statement to acknowledge the softening in the labor market but do not expect a change to the policy guidance or a nod to an October cut. However, Chair Powell might hint softly in that direction in his press conference,” David Mericle wrote to CNBC in a note.

Meanwhile, a separate economist suggests that “such an emergency-sized move” that Trump envisions “is not justified by the current data.”

“Any decision to cut by 50 basis points at this stage would appear to be driven more by political pressure than economic necessity,” Seema Shah, chief global strategist at Principal Asset Management, told CNN.

The California Public Utilities Commission is expected to allow Southern California Edison to hike customer bills by nearly 10% next month, and there may be more increases to come.

Edison’s plan would boost the average residential bill by $17 a month or about $200 a year, the commission said. The monthly bill for a customer using 500 kilowatts would jump from $171 to $188 on Oct. 1.

The five commissioners are scheduled to vote Thursday on the PUC administrative law judge’s proposal. It’s just one of multiple rate hikes Edison has asked the commission to approve in the coming year.

Scores of angry customers have written to the commission since Edison proposed the hike, asking the panel to deny it.

Some customers have pointed out that even as Edison has charged more for tree trimming and equipment upgrades meant to make its system safer and more reliable, its electric lines continue to spark fires.

The company now faces dozens of lawsuits from victims of the Jan. 7 Eaton fire, which killed at least 19 people and destroyed thousands of homes in Altadena. Video captured the fire igniting under an Edison transmission tower. The investigation into the fire’s cause is continuing.

“Please, do not let SCE pass their damages on to their customers,” Sara Green, a Crestline resident, wrote to the commission. “Let them cut executive salaries and forgo dividends, rather than pass this on unilaterally to every customer.”

Other customers have complained about increasing outages, including the preventative blackouts the company uses to try to stop its equipment from sparking fires in hot, windy weather.

William Pilling, a resident of Rovana, a small unincorporated community near Bishop, told the commission last month that he and his neighbors were experiencing “highly frequent service interruptions.”

“This is the very definition of unreliable service,” Pilling wrote. ”We are now being asked to pay more per unit for a lower quality good.”

David Eisenhauer, an Edison spokesman, said in an interview that the company was sensitive to concerns about rising rates. “We know that rate changes are challenging for customers,” he said.

“The cost of action is high, but the cost of inaction is higher,” Eisenhauer said. The increases, he said, were needed to support “a reliable and resilient electric grid that is ready to enable the clean energy transition.”

The proposed 10% hike is the result of what the commission calls a general rate case, where the agency allows utilities to propose how much they need to spend to operate and maintain the electrical grid for the next four years.

After months of hearings and debate, an administrative law judge recommended that the commission allow Edison to spend $9.8 billion on those costs this year — 13.7% more than the amount authorized for last year, according to the release. The proposal is less than the nearly $10.5 billion that Edison had initially requested.

Under the plan, Edison will get additional increases for inflation — and customers will see corresponding hikes — for each year through 2028, the commission said.

Edison says it has increased its spending aimed at preventing wildfires, including by undergrounding lines, installing new insulated wires and increasing equipment inspections in areas with high fire risk. The company has also increased the trimming of trees and other vegetation growing near its equipment.

Eisenhauer said that since 2019 wildfire-related investments have helped drive up rates.

He added that demand for electricity is “growing faster than it has in decades” leading to higher costs. In addition, he said, “threats to grid safety and reliability are becoming more frequent and more costly.”

Since 2014, Edison’s rates have risen by 80% — more than twice the rate of inflation, the commission’s public advocates office said in a May report.

More than 860,000 Edison customers — or 19% of the total — are behind in paying their electric bills, the report said. The average unpaid balance was $957.

The proposed 10% hike is one of several increases Edison has asked the commission to approve, or that state officials have already greenlighted.

In November, customers who use little electricity, like those living in small apartments or those owning solar panels, will see higher bills when the company begins adding a $24 monthly fixed charge, according to a recent Edison release.

In return, the price per kilowatt hour will fall, leading to possible savings for those using more power. For example, a residential customer using 1,000 kilowatts per month — double the average — will see their bill decline to $355 from $380, according to the release.

The commission designed the new monthly charge, which applies to customers of the state’s three largest for-profit electric companies, so that revenue increases from the new fees match the loss from the lower price per kilowatt hour.

The new fee was created under a bill pushed through the state Legislature in 2022 by Gov. Gavin Newsom. The utilities asked for the change in how electricity was billed to encourage Californians to switch to electric-powered vehicles and home appliances.

Edison also expects to raise rates for the damages from two catastrophic wildfires that investigators found the utility’s equipment sparked.

It has asked the commission for a nearly 2% increase to cover $5.4 billion in damages from the 2018 Woolsey fire, which killed three people and destroyed more than 1,600 homes and other structures in Malibu and nearby communities.

Earlier this year, the commission agreed Edison could increase rates by less than 1% to collect $1.6 billion from customers for damages from the 2017 Thomas fire. The blaze burned more than 280,000 acres in Ventura and Santa Barbara counties and left barren hillsides that helped set off mudslides in Montecito that killed 23 people. The commission must still sign off on final approval of the hike.

Eisenhauer said that under state law utilities are allowed to shift fire damages to customers if they have operated their system prudently and reasonably. He said the two fires were “largely driven by unprecedented and extreme weather events and other factors outside SCE’s control.”

In another proposal, Edison has asked the commission to raise customer bills by 2.1% to increase profits going to its investors, according to its customer notice. The plan would increase its cost of capital — the rate that helps determine how much profit it earns when it builds electric lines and other infrastructure.

The utility asked for the increase in investor profits after its stock price plummeted in January when lawyers claimed its transmission line had ignited the Eaton fire. The company told the commission that because of California’s high risk of wildfire, it needed to earn higher profits to encourage investors to continue holding its stock and to bolster its credit rating.

Despite Edison’s rapidly rising spending on insulated wires, tree trimming and other fire prevention work, its equipment sparked 178 fires last year — up from 90 in 2023.

Company executives said most of those ignitions were small fires that did not spread. The number of fires each year, they said, depends on the weather. Last year, heavy rain and then hot weather, they said, left more dried vegetation.

Edison has said its increased fire prevention work will decrease the number of times that it must shut off power to communities in hot, windy weather to stop lines from sparking fires.

Yet the company said at an Aug. 19 meeting that it expects the number of days of preventative power shutoffs to increase by 20% to 40% this year and that the number of customers subject to them could be twice as high.

Eisenhauer explained that the number of preventative shutoffs was expected to rise because the utility recently lowered the wind speed thresholds that trigger them. The company also added 47,000 more customers to areas believed to have high fire risk, which are subject to the preventative shutoffs, he said.

At the August meeting, Edison executives touted the success of the company’s fire prevention work.

In a presentation, Timothy O’Toole, an Edison board member and head of its safety and operations committee, noted the devastation the January fires caused in and around Los Angeles.

“Nonetheless, we remain very proud and confident in the progress we’ve made,” he said.

O’Toole said the utility’s fire prevention work had “created ever greater protection for our communities and our customers.”

Later in the meeting, Caroline Thomas Jacobs, director of the state Office of Energy Infrastructure Safety, questioned O’Toole’s repeated praise of the company’s work to prevent fires.

“Your tone sounded defensive and justifying the progress that’s made as opposed to acknowledging the humility of what an event like the January fires I would think would bring,” she said to O’Toole.

The public can comment on the proposed hike at the meeting on Thursday or in the docket for the case.

A series of federal actions aimed at pressuring states to allow parents to opt out of school vaccine mandates for religious or personal reasons threatens to undermine California’s ironclad ban on such exemptions.

California is one of just five states that bans any non-medical exemptions, the result of a landmark 2015 law passed in the wake of the Disneyland measles outbreak. Connecticut, New York, Maine, and West Virginia have similar statutes.

The law is credited with bringing California’s rate of kindergartners vaccinated against the measles to 96.1% in the 2024-25 school year, up from 92.6% in 2014-15, even as the national rate declined. California is one of just 10 states with a kindergarten measles vaccination rate that exceeds the 95% threshold experts say is needed to achieve herd immunity.

If vaccine mandates are weakened, “we’re going to have more outbreaks, and schools are going to be less safe for the families who have children who are vulnerable,” said Dr. Eric Ball, a pediatrician in Orange County and chair of the American Academy of Pediatrics California.

Engage with our community-funded journalism as we delve into child care, transitional kindergarten, health and other issues affecting children from birth through age 5.

Key actions to allow for vaccine exemptions include:

• Legislation introduced in Congress last month would withhold federal education funding from states without religious exemptions.
• A letter from the Department of Health and Human Services threatened to withhold federal vaccine funding from states that have any form of religious freedom or personal conscience laws but do not allow exemptions to vaccines. The move is “part of a larger effort by HHS to strengthen enforcement of laws protecting conscience and religious exercise.”
• Several lawsuits winding their way through the courts from parents — including in California — seek the right to a religious exemption, which may eventually come before the Supreme Court.

Legal experts say that taken together, these moves reveal a concerted effort to chip away at limits states like California have placed on parents’ ability to send their unvaccinated children to school.

“We should assume that every aspect of the administration, at least three justices of the Supreme Court, and a significant contingent in Congress are actively trying to implement changes to the law that would invalidate California’s … approach to not allowing non-medical exemptions,” said Lindsay Wiley, a law professor at UCLA.

In West Virginia, the approach is already proving successful. Despite the state legislature recently rejecting a bill that would have permitted religious exemptions for the first time, Republican Gov. Patrick Morrisey signed an executive order allowing them, bolstered by a letter of support from HHS.

Vaccinations and syringes at Larchmont Pediatrics in Los Angeles.

(Allen J. Schaben/Los Angeles Times)

“Vaccination is considered one of public health’s greatest achievements, preventing the spread of serious illnesses, reducing hospitalizations and saving lives,” the statement said. “CDPH remains committed to ensuring that all Californians continue to have access to safe and effective vaccines that are based on credible, transparent and science-based evidence.”

The federal actions are occurring in a moment of growing anti-vaccine fervor within the Trump administration. HHS Secretary Robert F. Kennedy, Jr. has long been an outspoken critic of vaccines, including the vaccine to prevent measles. As secretary of HHS, he has defunded mRNA research, limited COVID-19 shots to the elderly and those with preexisting medical conditions, and pledged to reveal a link between vaccines and autism.

California’s evolution on vaccine mandates

In 1961, California became one of the first states to permit residents to opt out of vaccines for a broad range of personal beliefs, as part of a law mandating the polio vaccine for school attendance.

For decades, few parents claimed the exemption, and the rate of children opting out of vaccines for non-medical reasons stayed around 0.5%, said Dr. Richard Pan, the former state senator who authored the 2015 law eliminating non-medical exemptions.

Pan said the rate of exemptions began to climb in the mid-2000s, when actress Jenny McCarthy appeared on Oprah and claimed that vaccines had caused her son’s autism. “But what really gave fuel” was the advent of Facebook and Twitter, said Pan. “Social media really connected people who are anti-vax and created an echo chamber.”

By the 2013-14 school year, 3.1% of California kindergartners were receiving a non-medical exemption to at least one required vaccine. The rate of kindergarteners fully vaccinated against the measles slipped to 92.3% — well below the 95% required for herd immunity.

In 2014, a single measles case at Disneyland spread to more than 140 people across the country, an outbreak that epidemiologists said was fueled by vaccine refusals. In this moment of crisis, Pan introduced SB277, making California the first state in nearly 35 years to eliminate non-medical vaccine exemptions.

The legislation received the support of many parents, especially those whose children could not be vaccinated for medical reasons and relied on the immunity of people around them. “The whole purpose of 277 was actually to protect the rights and the freedoms of families and their children to get an education who could not get vaccinated,” said Pan.

Despite bitter debate, no major religious denominations opposed the bill, Pan said.

“This really isn’t about religion,” Pan said. “This is about trying to find a loophole or an excuse for someone who doesn’t want to vaccinate their child.”

Parents say California’s mandate violates religious beliefs

A contingent of parents say their sincere religious beliefs prevent them from getting their children vaccinated.

In 2023, Amy and Steve Doescher of Placerville brought a federal lawsuit, along with two other families, against California claiming that SB277 had violated their right to freely exercise their religion by preventing them from sending their 16-year-old daughter to public school.

The Doeschers, who attend a church near their home, “prayed extensively and consulted the Bible when deciding whether to vaccinate their children, and they arrived at the firm religious conviction that vaccinations violate their creed,” according to a complaint filed as part of the lawsuit.

Their daughter, who is enrolled in a charter school independent study program, is unable to have “the typical interactions with children that ‘normal’ children get. This has caused much stigma.”

The lawsuit alleges that her parents have had to enroll her in gymnastics classes and spend $10,000 per year on independent study costs, “to make up for the socialization shortcomings caused by SB277.”

While the lawsuit was dismissed in June, it is now on appeal at the 9th Circuit Court of Appeals. Lawyers in a similar New York lawsuit brought by Amish parents have requested review from the Supreme Court.

“I do think it’s a cumulative moment of change,” said Christina Hildebrand, president and founder of A Voice for Choice, an advocacy group that sponsored the California lawsuit.

“If vaccines are so effective and they don’t have risk involved, then people should want to get them,” she said. “How good really is the product if you’re having to put a mandate on them?”

UCLA Law’s Wiley said she is sympathetic to sincere religious objectors, and herd immunity can still be reached even if a small number of people opt out. The problem, she said, is that they’re difficult for states to police for validity and “can really open the floodgates to vastly diminished vaccination rates.”

Dorit Reiss, a law professor at the University of California at San Francisco who studies vaccines, said religious exemptions are often “used as a fig leaf for people who have safety concerns. The way the system works is that it privileges the good liars.”

As part of her research, she has found “a whole industry of people trying to help each other get exemptions” online, including those who offer sample requests to parents and workshops on how to claim a religious exemption for non-religious reasons.

Reiss points to numerous studies finding that making exemptions broader and easier to get tends to lead to lower vaccination rates and more outbreaks.

The volatile landscape for vaccine mandates

Since the COVID pandemic, states across the country have experienced a decline in the rate of kindergartners who are fully vaccinated, and an increase in parents seeking exemptions, according to a recent report from KFF, a nonprofit health research group.

Last week, Florida’s surgeon general announced the state would no longer require children to be vaccinated in order to attend public school, something that all 50 states currently require.

Threats are also mounting from Washington, D.C. The GRACE Act, which was introduced in Congress last month by Rep. Greg Steube (R-FL), would withhold federal education funding from any state that does not offer parents the right to opt out of vaccines for religious reasons.

The bill, if eventually approved and signed into law by President Trump, would also explicitly prevent states, including California, from requiring any documentation from parents to prove a sincere religious conviction against vaccines.

“Freedom of speech and religion is the most sacred right guaranteed under our Constitution,” Rep. Steube said in a statement to The Times. “No student or their family should ever be coerced into sacrificing their faith or jumping through loopholes to comply with a vaccine requirement.”

Last week, Kennedy weighed in on the issue. He said in a letter that if a state already has statutes on the books protecting religious freedom or personal conscience in any form, those laws must extend to vaccine opt-outs. If states with such laws do not comply with the directive, they could lose funding for the federal Vaccines for Children Program, which funds vaccines for low-income children.

California does not have religious freedom or personal conscience statues. But 29 other states have passed religious freedom laws, and 18 have parental rights laws, which legal experts said could be used by the federal government to compel states to offer vaccine opt-outs.

“States have the authority to balance public health goals with individual freedom, and honoring those decisions builds trust” Kennedy wrote. “Protecting both public health and personal liberty is how we restore faith in our institutions and Make America Healthy Again.”

Several legal experts said the approach was alarming.

“I’m very concerned that this is part of a playbook where they’re going on a state and federal level, to push on these laws,” said Richard Hughes, a lawyer with Epstein Becker Green in Washington, D.C., who has been working on vaccine law for two decades. “This is a massive federal overreach, and it’s incredibly inappropriate.”

This article is part of The Times’ early childhood education initiative, focusing on the learning and development of California children from birth to age 5. For more information about the initiative and its philanthropic funders, go to latimes.com/earlyed.

Aug. 30 (UPI) — Passengers on Southeastern Philadelphia Transportation Authority buses won’t pay higher fares or deal with more service reductions at least until Thursday.

Philadelphia County Court of Common Pleas Judge Sierra Thomas Street temporarily enjoined SEPTA from raising fares by 21.5% on Monday and cutting more services on Tuesday after conducting an emergency hearing on Friday.

The injunction also stops SEPTA from reducing more routes, imposing curfews, closing stations and eliminating special services.

“The judge wants us to keep service at the levels we’re running today,” SEPTA General Manager Scott Sauer told WPVI-TV.

“That’s going to take a lot of effort,” Sauer said. “We need 10 days to turn this around. We’re going to take a look at how best we can comply with that order.”

Another hearing on the matter is scheduled on Thursday.

SEPTA on Thursday announced it would raise fares by 21.5% on Monday and impose an additional 20% service reduction for Regional Rail, but the ruling delays those cuts.

SEPTA has a $213 million budget deficit and did not succeed in gaining new state funding.

The rate increase would raise to $2.90 the base fare for bus and Metro trips, which ties New York for the nation’s highest.

“We are now at a place that none of us ever wanted to be,” Sauer said in a SEPTA news release issued on Thursday.

“Wait times between trips are longer and vehicles are more crowded, affecting thousands of people trying to get to work and school on time,” he added.

SEPTA on Sunday cut 20% of bus and Metro services, including eliminating 32 bus routes.

SEPTA also has frozen all hiring, including bus drivers, as of Monday and has had a shortage of bus drivers since the pandemic.

Additional service cuts are planned on Jan. 1, with the elimination of 18 bus routes and five regional rail lines, while imposing a 9 p.m. curfew on all rail services.

It’s probably safe to say that almost no one following the news believes that Donald Trump has a solid, defensible reason to fire Federal Reserve Board Governor Lisa Cook, as he purported to do Monday, notwithstanding his assertion that she is guilty of “potentially criminal conduct.”

It’s not only that the charge she falsified information on mortgage applications is unproven, or that even on their face the accusations are thinner than onion-skin paper.

It’s that Trump has telegraphed his true objective loud and clear virtually from the inception of his current term: to destroy the Fed’s independence so he can force it to act in accordance with what he sees as his immediate political advantage, chiefly by cutting interest rates at a time when that would be economically irrational.

He has pursued this objective in several ways. He has consistently denigrated the work of Fed Chairman Jerome Powell, questioning why Powell was ever appointed (and forgetting that he was the president who appointed Powell).

He has carried on about the cost of a renovation of the Fed’s Washington headquarters building, even misrepresenting the cost and nature of the project, suggesting that it points to Powell’s managerial ineptitude.

And now he’s trying to fire Cook, one of Powell’s supporters on the Fed board. Whether he can do so in the face of Cook’s refusal to go is unclear, and likely to be judged on by the Supreme Court.

That leads us to the principle of Federal Reserve independence and its critical importance for the health of the U.S. economy.

The Fed isn’t the only central bank that cherishes its independence. Most central banks in developed countries do too, although they solidified their status at different times — the Bank of England gaining operational independence over monetary policy in Britain only in 1997.

To be fair, the character of central bank independence has always been murky. “Central banks do not and should not operate in a vacuum,” Tobias Adrian and Ashraf Khan of the International Monetary Fund observed in 2019, acknowledging that “as public institutions, central banks should be held properly accountable to lawmakers and to society.”

Indeed, to paraphrase Finley Peter Dunne’s Mr. Dooley, throughout its own history the Fed, like the Supreme Court, has “followed the election returns.”

That is, it’s rare for the central bank to range too far from what the public expects from government economic management. In any event, the Fed is a creation of Congress, which could theoretically expand or narrow its monetary policy authority and structure its board to make it more responsive to partisan politics.

The consensus among economists is that doing so would be unwise. Political leaders who have made their central banks subservient to their own policies have almost invariably learned the consequences the hard way, as economists across the economic spectrum observe.

“If a legislature or executive can order the central bank to print money,” wrote Thomas L. Hogan of the conservative American Institute for Economic Research in 2020, “then the government can spend without limit …which can lead to hyperinflation and economic disaster as seen in countries such as Zimbabwe, Venezuela, and Argentina.”

That’s a lesson that economists began urging on Trump as he stepped up his attacks on the Fed. “No one’s claiming that central bankers are going to be perfect at their jobs,” Peter Conti-Brown of the Wharton School said recently. “What we’re saying is that they’re going to be better than the alternative. The alternative is setting interest rate policy from the Oval Office, according to the whims of whatever the president wants to see that day. That’s the main alternative to central banking. And that’s what’s under threat today.”

The United States also learned the value of an independent Fed the hard way. For more than three decades after its creation in 1913, the Fed was largely a handmaiden of the U.S. Treasury; the Treasury secretary and comptroller of the currency were ex officio members of its board, and the Treasury secretary presided over its meetings.

That version of the Fed proved unequal to managing macroeconomic policy as the Great Depression deepened. It had few powers with which to set policy, especially with Franklin Roosevelt taking the reins of economic policy in his own hands.

FDR unilaterally took the U.S. off the gold standard in 1933. He would set the price of gold every morning with aides at his bedside, prompting the British economic sage John Maynard Keynes to complain directly to Roosevelt that “the recent gyrations of the dollar” looked to him “like a gold standard on the booze.”

Roosevelt eventually gave up on manipulating the price of gold and consequently the value of the dollar. He also recognized that the nation needed a firmer, professional hand on the monetary faucet. The solution came from the progressive-minded Utah banker Marriner Eccles, whom FDR tasked with remaking the Fed.

Eccles is almost entirely unknown to the public, but he’s revered among economic policy wonks — which explains why his name is on the Fed headquarters building. After FDR appointed him to head the Federal Reserve Board, Eccles oversaw the drafting of the Banking Act of 1935, which centralized monetary policy in the Fed board and gave it new powers to manage the money supply. Eccles remained the board’s chairman until 1948 and remained a board member until 1951.

Despite those reforms, however, the Fed remained tied to political imperatives, chiefly the financing of America’s fiscal needs during World War II, policies firmly under the control of the Treasury. “We are not masters in our own house,” one Fed bank governor lamented.

That began to change in 1950, when the process of paying for war expenses had triggered an inflationary spiral. The consumer price index rose by 17.6% in 1946-47 and another 9.5% the following fiscal year, thanks in part by the end of wartime price controls and the “pegging” of long-term treasury bond rates at 2.5%.

The onset of the Korean War in 1950 threatened more inflation. President Truman insisted on leaving the peg at 2.5% in order to limit the cost of government spending on the new war. Eccles and others on the Fed board feared, however, that keeping the rate from rising above 2.5% would require the Fed to keep buying T-bonds, which pumped more dollars into the money supply and fueled inflation. The Fed wanted to allow rates to rise, which was anathema to the White House.

This concern placed the Fed in open conflict with Truman and his Treasury secretary, his crony John Wesley Snyder. The Fed and Snyder engaged in increasingly acrimonious meetings, after one of which the White House issued a communique that falsely stated that the Fed had agreed to follow the administration’s demands. The Fed then issued its own statement, directly contradicting Truman’s.

Truman maintained publicly that keeping rates low was crucial for the fight against communism. “I hope the Board will … not allow the bottom to drop from under our securities,” Truman said, referring to the decline of treasury prices if the board let rates rise. “If that happens, that is exactly what Mr. Stalin wants.” Eccles, for his part, told Congress that if the Fed were forced to maintain the 2.5% peg, that would make the Fed itself “an engine of inflation.”

The war of words continued, until Assistant Treasury Secretary William McChesney Martin took over negotiations with the Fed from Snyder, who was recovering from surgery. Martin broke the logjam. The result was the Treasury-Fed Accord of March 4, 1951, a landmark document in Federal Reserve history. The accord gave the Fed full rein to manage short-term interest rates in return for its keeping long-term rates within the peg until the end of that year.

Truman appointed Martin as Fed chairman a few weeks later; some saw the appointment as a Treasury takeover, but Martin proved to be a firm advocate of Fed independence. The accord, as explained by Robert L. Hetzel of the Richmond Fed and Ralph Leach, who personally witnessed the 1951 negotiations, “marked the start of the modern Federal Reserve System” and established the central bank’s “dual mandate” of promoting stable prices and maximizing employment.

That doesn’t mean that the Fed rigorously honored its hard-won independence. Fed Chairman Arthur Burns acceded to Richard Nixon’s urging to keep rates low in advance of the 1972 presidential election. It was a disastrous misstep. Inflation soared, especially during the Arab oil embargo, peaking at nearly 15% in 1980.

It fell to Paul Volcker, who became chairman in 1979, to use the Fed’s authority to slay the inflationary beast. Volcker drove the Fed’s key rate nearly to 20%, provoking a recession and a sharp rise in unemployment. But the inflation rate fell back to 3.8% by 1983 and as low as 1.1% in 1986. Volckeer’s actions arguably set the stage for Ronald Reagan’s defeat of Jimmy Carter in 1980, but arguably he could not have taken the stringent measures needed to bring inflation down if he bowed to Carter’s electoral needs.

Former Fed Chair Ben Bernanke set forth the perils of political influence on the Fed in 2020, warning that central banks subjected to political pressure might “overstimulate the economy to achieve short-term … gains.” Those may be “popular at first, and thus helpful in an election campaign, but they are not sustainable and soon evaporate, leaving behind only inflationary pressures that worsen the economy’s longer-term prospects.”

That’s the prospect facing the U.S. as Trump keeps trying to erode the Fed’s independence, insisting on a rate cut no matter the overall economic environment. As it happens, he may get the rate cut he desires, but only because his tariff and immigration policies are sapping America’s economic strength, producing a slump that warrants a reduction.

Where will we go from here? Powell’s term as Fed chair expires next May. He has been admirably protective of the bank’s independence while in office, but it’s a safe bet that his Trump-appointed successor won’t be so solicitous. Harder times for the Fed, and the economy, may lurk over the horizon.

Aug. 22 (UPI) — Federal Reserve Chairman Jerome Powell on Friday did not give a clear indication of the central bank’s plans to possibly cut interest rates amid pressure from President Donald Trump but spoke to the difficult conditions affecting decisionmakers.

Speaking from the annual Economic Policy Symposium in Jackson Hole, Wyoming, Powell said “in the near term, risks to inflation are tilted to the upside, and risks to employment to the downside” referring to two factors the Fed uses to determine if rates should change or stay as is, the latter of which is considered a barrier to inflation.

“In terms of the Fed’s dual-mandate goals, he labor market remains near maximum employment, and inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. At the same time, the balance of risks appears to be shifting,” he said.

Mentioning “risks” was the closest Powell came to declaring rate cuts are in the works, which some investors are expecting to be enacted when the Federal Open Market Committee next meets in September.

Powell noted that while the Fed’s dual mandate requires “balance,” but also added that “the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance.

“The Fed also announced Friday that the Federal Open Market Committee, or FOMC, which decides interest rates, has approved its latest updated “Statement on Longer-Run Goals and Monetary Policy Strategy,” which explains how it handles monetary policies and uses it to guide policy actions.

In a press release, the committee stated that it’s “prepared to act forcefully to ensure that longer-term inflation expectations remain well anchored.”

“Therefore, the Committee’s policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the Committee’s goals,” the committee further stated.

Aug. 9 (UPI) — The Federal Reserve has not approved an interest rate cut since before the Nov. 5 election, but one of its governors said she wants three rate cuts this year.

Federal Reserve Gov. Michelle “Miki” Bowman dissented from the Federal Open Market Committee’s decision last week to maintain the current Fed rate of between 4.25% and 4.5%, she said on Saturday.

She said “signs of fragility in labor market conditions” caused her to support gradually lowering the Federal Reserve’s interest rate with three successive reductions, starting in July.

“Economic conditions appeared to be shifting,” Bowman said. “As a result, we should reflect this shift in our policy decisions.”

Bowman said, “Inflation has moved considerably closer to our target, after excluding temporary effects of tariffs, and the labor market has remained near full employment.”

“With economic growth slowing this year and signs of a less dynamic labor market becoming clear,” Bowman explained, “I see it as appropriate to begin gradually moving our moderately restrictive policy stance toward a neutral setting.”

“Taking action at last week’s meeting would have proactively hedged against the risk of a further erosion in labor market conditions and a further weakening in economic activity,” she added.

Bowman said the nation’s economy “has been resilient” this year, but consumer spending has eased, while “residential investment” has declined.

“Consumer spending on both goods and services has risen only modestly, reflecting slow gains in disposable personal income, lower levels of liquid savings and high credit card utilization,” Bowman continued.

She cited weakened housing demand that has reached a level that hasn’t been seen since the Great Recession.

“Housing activity has declined, including in single-family home construction and sales, as listings of homes for sale are growing and house prices are falling,” Bowman explained.

The nation’s employment-to-population ratio also has declined significantly so far this year, which she said suggests labor market conditions are softening.

“Payroll employment growth slowed sharply to only 35,000 jobs per month over the three months ending in July,” Bowman said.

“This is well below the moderate pace seen earlier in the year, likely due to a significant softening in labor demand,” she added.

Bowman also said President Donald Trump‘s tariff policies will not “present a persistent shock to inflation” because price-stability risks have eased.

Bowman made her comments while addressing the Kansas Bankers Association’s 2025 CEO & Senior Management Summit in Colorado Springs, Colo., on Saturday.

She is one of seven Federal Reserve governors who serve 14-year terms after being nominated by the president and confirmed by the Senate.

Bowman and Federal Reserve Gov. Christopher Waller both dissented when the Federal Reserve voted to maintain the current interest rates in July.

It was the first time in more than three decades that two Federal Reserve governors dissented from the majority decision, according to MarketWatch.

Trump appointed Bowman and Waller to the Federal Reserve in 2018 and 2020, respectively.

WASHINGTON — For weeks, President Trump was promising the world economy would change on Friday with his new tariffs in place. It was an ironclad deadline, administration officials assured the public.

But when Trump signed the order Thursday night imposing new tariffs, the start date of the punishing import taxes was pushed back seven days so the tariff schedule could be updated. The change in tariffs on 66 countries, the European Union, Taiwan and the Falkland Islands was potentially welcome news to countries that had not yet reached a deal with the U.S. It also injected a new dose of uncertainty for consumers and businesses still wondering what’s going to happen and when.

Trump told NBC News in a Thursday night interview the tariffs process was going “very well, very smooth.” But even as the Republican president insisted these new rates would stay in place, he added: “It doesn’t mean that somebody doesn’t come along in four weeks and say we can make some kind of a deal.”

Trump has promised that his tax increases on the nearly $3 trillion in goods imported to the United States will usher in newfound wealth, launch a cavalcade of new factory jobs, reduce the budget deficits and, simply, get other countries to treat America with more respect.

The vast tariffs risk jeopardizing America’s global standing as allies feel forced into unfriendly deals. As taxes on the raw materials used by U.S. factories and basic goods, the tariffs also threaten to create new inflationary pressures and hamper economic growth — concerns the Trump White House has dismissed.

Questions swirl around the tariffs despite Trump’s eagerness

As the clock ticked toward Trump’s self-imposed deadline, few things seemed to be settled other than the president’s determination to levy the taxes he has talked about for decades. The very legality of the tariffs remains an open question as a U.S. appeals court on Thursday heard arguments on whether Trump had exceeded his authority by declaring an “emergency” under a 1977 law to charge the tariffs, allowing him to avoid congressional approval.

Trump was ebullient as much of the world awaited what he would do.

“Tariffs are making America GREAT & RICH Again,” he said Thursday morning on Truth Social.

Others saw a policy carelessly constructed by the U.S. president, one that could impose harms gradually over time that would erode America’s power and prosperity.

“The only things we’ll know for sure on Friday morning are that growth-sapping U.S. import taxes will be historically high and complex, and that, because these deals are so vague and unfinished, policy uncertainty will remain very elevated,” said Scott Lincicome, a vice president of economics at the Cato Institute. “The rest is very much TBD.”

The new tariffs build off ones announced in the spring

Trump initially imposed the Friday deadline after his previous “Liberation Day” tariffs in April resulted in a stock market panic. His unusually high tariff rates announced then led to recession fears, prompting Trump to impose a 90-day negotiating period. When he was unable to create enough trade deals with other countries, he extended the timeline and sent out letters to world leaders that simply listed rates, prompting a slew of hasty agreements.

Swiss imports will now be taxed at a higher rate, 39%, than the 31% Trump threatened in April, while Liechtenstein saw its rate slashed from 37% to 15%. Countries not listed in the Thursday night order would be charged a baseline 10% tariff.

Trump negotiated trade frameworks over the past few weeks with the EU, Japan, South Korea, Indonesia and the Philippines — allowing the president to claim victories as other nations sought to limit his threat of charging even higher tariff rates. He said Thursday there were agreements with other countries, but he declined to name them.

Asked on Friday if countries were happy with the rates set by Trump, U.S. Trade Representative Jamieson Greer said: “A lot of them are.”

Thursday began with a palpable sense of tension

The EU was awaiting a written agreement on its 15% tariff deal. Switzerland and Norway were among the dozens of countries that did not know what their tariff rate would be, while Trump agreed after a Thursday morning phone call to keep Mexico’s tariffs at 25% for a 90-day negotiating period. The president separately on Thursday amended an order to raise certain tariffs on Canada to 35%.

European leaders face blowback for seeming to cave to Trump, even as they insist that this is merely the start of talks and stress the importance of maintaining America’s support of Ukraine’s fight against Russia. Canadian Prime Minister Mark Carney has already indicated that his country can no longer rely on the U.S. as an ally, and Trump declined to talk to him on Thursday.

India, with its 25% tariff announced Wednesday by Trump, may no longer benefit as much from efforts to pivot manufacturing out of China. While the Trump administration has sought to challenge China’s manufacturing dominance, it is separately in extended trade talks with that country, which faces a 30% tariff and is charging a 10% retaliatory rate on the U.S.

Major companies came into the week warning that tariffs would begin to squeeze them financially. Ford Motor Co. said it anticipated a net $2 billion hit to earnings this year from tariffs. French skincare company Yon-Ka is warning of job freezes, scaled-back investment and rising prices.

It’s unclear whether Trump’s new tariffs will survive a legal challenge

Federal judges sounded skeptical Thursday about Trump’s use of a 1977 law to declare the long-standing U.S. trade deficit a national emergency that justifies tariffs on almost every country.

“You’re asking for an unbounded authority,” Judge Todd Hughes of the U.S. Court of Appeals for the Federal Circuit told a Justice Department lawyer representing the administration.

The judges didn’t immediately rule, and the case is expected to reach the Supreme Court eventually.

The Trump White House has pointed to the increase in federal revenues as a sign that the tariffs will reduce the budget deficit, with $127 billion in customs and duties collected so far this year — about $70 billion more than last year.

New tariffs threaten to raise inflation rates

There are not yet signs that tariffs will lead to more domestic manufacturing jobs, and Friday’s employment report showed the U.S. economy now has 37,000 fewer manufacturing jobs than it did in April.

On Thursday, one crucial measure of inflation, known as the Personal Consumption Expenditures index, showed that prices have climbed 2.6% over the 12 months that ended in June, a sign that inflation may be accelerating as the tariffs flow through the economy.

The prospect of higher inflation from the tariffs has caused the Federal Reserve to hold off on additional cuts to its benchmark rates, a point of frustration for Trump, who on Truth Social, called Fed Chair Jerome Powell a “TOTAL LOSER.”

But before Trump’s tariffs, Powell seemed to suggest that the tariffs had put the U.S. economy and much of the world into a state of unknowns.

“There are many uncertainties left to resolve,” Powell told reporters Wednesday. “So, yes, we are learning more and more. It doesn’t feel like we’re very close to the end of that process. And that’s not for us to judge, but it does — it feels like there’s much more to come.”

Boak writes for the Associated Press. AP writer Paul Wiseman contributed to this report.

SEOUL — President Trump announced on Wednesday that the U.S. had struck a trade deal with South Korea, which will now face a 15% tariff on its exports.

Under the deal, South Korea will invest $350 billion in key U.S. industries and purchase $100 billion worth of its liquified natural gas, Trump wrote on social media on Wednesday. He added that further investments would be announced when South Korean President Lee Jae Myung visits Washington in the next two weeks.

The new rate is a significant reduction from the 25% Trump had announced via a letter earlier this month, but still a blow to the longstanding free trade regime that had, for years, kept duties on goods from either country close to zero. Trump has long decried this arrangement as unfair to the U.S., which last year recorded a $66 billion trade deficit with South Korea.

“We are seeing that the negotiations happening in many countries since April are unfolding in a way that is very different from the principles of the WTO or FTA,” said Kim Yong-beom, a senior policy official for South Korea’s presidential office, at a press conference on Thursday. “It is regrettable.”

Kim said that South Korean negotiators had pushed for a 12.5% rate on automobiles — one of the country’s most important exports to the U.S. — but that they had been rebuffed, with Trump firm on his stance that “everybody gets 15%.”

U.S. and South Korean officials appear to be interpreting the deal — whose details are still scant — in different ways.

New cars for export on a car carrier trailer arrive at a port in Pyeongtaek, South Korea, on April 15, 2025.

(Lee Jin-man / Associated Press)

Calling it an “historic trade deal,” commerce secretary Howard Lutnick wrote on social media that “90% of the profits” of South Korea’s $350 billion investment would go “to the American people,” a claim that has immediately raised eyebrows in South Korea.

Trump said something similar about the $550 billion investment package included in the trade deal struck with Japan earlier this month. Japanese officials, on the other hand, have said the profits would be split proportionately, based on the amount of contribution and risk from each side.

At the press conference, Kim said that Seoul is operating under the assumption that 90% of the profits will be “re-invested” — not unilaterally claimed. He added that the specific terms still need to be laid out on a “per-project basis.”

“In a normal civilized country, who would be able to accept that we invest the money while the U.S. takes 90% of the profits?“ he asked.

South Korean President Lee Jae Myung has framed the $350 billion investment as a boost to South Korean shipbuilding, semiconductor and energy companies trying to make inroads into the U.S. markets.

“This agreement is the meeting of the U.S.’ interest in reviving manufacturing and our intention to make South Korea companies more competitive in the U.S. market,” he said in a social media post on Thursday. “I hope that it will strengthen industrial cooperation between South Korea and the U.S. as well as our military alliance.”

While Trump also said that “South Korea will be completely OPEN TO TRADE with the United States, and that they will accept American product including Cars and Trucks, Agriculture, etc,” Kim said that agriculture was not part of the deal and that no concessions on U.S. rice or beef — two major points of contention between Seoul and Washington — were given.

South Korea, which is the world’s top importer of American beef, currently bans beef from cattle that are older than 30 months on concerns it may introduce bovine spongiform encephalopathy, or mad cow disease.

Given its status as a staple crop and a critical source of farmers’ livelihoods, rice is one of the few agricultural goods heavily protected by the South Korean government. Seoul currently imposes a 5% tariff on U.S. rice up to 132,304 tons, and 513% for any excess.

“We were able to successfully defend a lot of our positions in those areas,” Kim said.

The president’s frequent attacks against Jerome Powell have sparked concerns about the independence of the central bank.

United States President Donald Trump has again attacked Federal Reserve Chair Jerome Powell, stepping up criticism that has sparked concerns over efforts to undermine the independence of the country’s central bank.

In remarks before religious figures at the White House on Monday, Trump called Powell a “knucklehead” and insisted that he should lower interest rates.

“He’s a knucklehead. Stupid guy. He really is,” Trump said, insisting that inflation is not currently a serious concern for the economy and that interest rates should be brought down to one percent.

The US president’s frequent barbs and threats to replace Powell have previously spooked markets, wary of what some investors see as an effort to bring the central bank and the crafting of monetary policy under greater political control.

The central bank chief has thus far refused to budge on the question of interest rates, saying that it is still too early to bring them down given sources of potential disruption such as changing tariff policy.

Trump said over the weekend that he is planning to place important US trading partners such as the European Union and Mexico under a 30 percent tariff starting on August 1, and has warned other countries they could face similar rates or worse if they do not swiftly come to individual agreements with the US.

Kevin Hassett, an economic adviser to Trump, also stated over the weekend that the president might be able to fire Powell for cause, citing higher-than-expected expenses for the renovation of the bank’s headquarters.

The Fed has been in the process of renovating two buildings for its offices in Washington, DC for several years, with a current cost estimate of $2.5bn, about $700m more than originally anticipated.

Such cost overruns are far from atypical in Washington, but officials in the Trump administration have pounced on them as a potential door to firing Powell, whom Trump has long criticised.

Trump’s top budget adviser Russell Vought said last week that the White House is “extremely troubled” by the expense of the project, which critics saw as an effort to pile additional pressure on the central bank. Vought played an important role in the controversial conservative blueprint for a second Trump term known as Project 2025, which envisions a radical restructuring of government and consolidation of greater power in the executive branch.

A spokesperson for the US Inspector General, a nonpartisan government watchdog, says that Powell has requested a review of the cost overruns.