Europe in late 2025 is seeing a cautious yet hopeful economic environment. While problems remain, there are signs the region is moving toward more stable ground. The European Central Bank has decided not to change its benchmark deposit rate, keeping it at 2%. Inflation in the euro-area is now around 2.1% (year-on-year for August), slightly above target but trending downward. Growth is modest, but recent data show slight upward revisions: 2025 GDP growth is now projected at 1.2%, up from earlier estimates of 0.9%. Europe is balancing inflation control with growth concerns. Persistent inflation, even at moderate levels, limits room to cut rates without risking price stability. Europe is at a crossroads where inflation is falling but not gone, growth is stable but modest, and external risks loom large. The region’s economy looks resilient in many ways but its future depends on how well policymakers navigate trade-offs and climate risks.
Monday, September 15, 2025
Talks on Tariffs and TikTok
Top U.S. and Chinese officials met in Madrid to extend a fragile trade truce that is going to expire in November. These talks covered tariffs, export controls, rare earth minerals, and the fate of TikTok, with tensions rising after fresh chip‑industry restrictions on both sides. China’s exports to the U.S. have fallen 15%, pushing Beijing to deepen ties elsewhere, even as it battles overcapacity at home. A potential Trump–Xi meeting at next month’s APEC summit could shape the outcome, but for now, the world’s two largest economies remain locked in a delicate balance between cooperation and confrontation.
Rappeport, A. (2025, September 15). U.S. and China hold fourth round of trade talks as TikTok deadline looms. https://www.nytimes.com/2025/09/14/business/us-china-trade-tiktok-negotiations.html
Trump Endorsed Changes to SEC Guidelines on Public Company Reports
In a Truth Social post today, trump stated that companies should no longer be forced to report earnings on a Quarterly basis and rather on a semi-annual basis.
Trump states that: “This will save money, and allow managers to focus on properly running their companies, ... Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis???’ Not good!!!!”
This reflects statements made by both his opponents and large figures within the investing community, such as Jamie Dimon of JPM Chase, Warren Buffett, and Hillary Clinton. It is alleged that this quarterly reporting practice has resulted in less publicly traded companies as they don't want to have the restriction of being short term rather than long term growth.
This idea is pending SEC review, however it has been pushed for by both private and public figures, and it seems very likely that this would be approved. Some of the key drawbacks are: lack of data being reported for economists & policy makers (i.e. travel demand shifts, loan losses, and updates on innovation driven economic booms [such as AI]). "Moving to a six-month reporting period could delay those insights and exaggerate stock moves during shifts in the economy and various industries."
Source: https://www.cnn.com/2025/09/15/economy/trump-quarterly-reporting-sec-earnings
Sunday, September 14, 2025
Rise in U.S. Inflation
U.S. inflation picked up in August, making things tricky for the Federal Reserve as it considers cutting interest rates. On one hand, slower job growth is raising concerns relating to the labor market. On the other, rising prices make the Fed cautious about moving too quickly. The latest Consumer Price Index showed inflation up 2.9% from last year, the fastest pace since early 2025. Core inflation, which excludes food and energy, held at 3.1%. Month to month, overall prices rose 0.4%, while core prices rose 0.3%, both slightly above expectations. The Fed has kept interest rates steady at 4.25%–4.5% this year after a series of cuts in late 2024. A big reason for the pause is concern over tariffs, which have driven up the costs of goods. Economist Nancy Lazar explained, “Tariffs are a tax… only companies with strong pricing power are holding up.” Several areas are fueling higher prices. Gasoline rose 1.9% in August, airfares spiked nearly 6%. New cars rose 0.3% and used cars climbed 1%, about 6% higher than last year. Housing costs went up 0.4%, and food prices increased 0.5%, with coffee alone surging 21% from a year earlier.
There was some relief, as utility gas and certain medical goods fell in price. The labor market adds another layer of complexity. Hiring has slowed, partly due to immigration restrictions, while layoffs remain low and unemployment is holding at 4.3%. That puts the Fed in a tough spot, they can cut rates to support jobs, or they keep rates high to control inflation. In the end, the Fed is will probably take things slowly. Rate cuts could help workers, but inflation isn’t going down fast enough. For now the central bank will probably move carefully, aiming to support the economy without letting prices spiral again.
America’s economy defies gloomy expectations
While forecasts and public beliefs expected a slowing of the economy, the U.S. economy has been steadfast and has surpassed expectations. GDP growth has become stabilized as the latest quarterly numbers showcase a higher than expected annualized increase. Fears of high interest rates have led to worries in the U.S. economy; however, strong consumer spending, strong labor market, and historically low unemployment are the key factors supporting this resiliency. Core inflation is still above the Federal Reserve's target, yet it is appears to finally be steady and under control. Three rate cuts this year are expected due to this unexpected strength of the economy which will ease this tension. Interestingly, the slow job growths, as the article states, should be taken with the context of slower population growth. The American Enterprise Institute and Brookings Institution believe the net migration number to be between -500,000 and 100,000 significantly lower than the 2 million expectation.
https://www.economist.com/finance-and-economics/2025/09/14/americas-economy-defies-gloomy-expectations
China is Ditching the dollar
China is pushing to elevate the value of the yuan, the Chinese currency, as trust in the dollar wanes by the day. Currently, the dollar is looking weaker due to America's rising debt, political uncertainties, and some uncertainty surrounding the banks. At the same time, China has been building its own financial systems, including a dollar-free payment network and a digital yuan. China is doing this in order to make it easier for countries to trade and invest without using dollars. China has also made deals with banks and shifted much of their overseas lending into yuan rather than the dollar. This move by China allows them to stay protected from US sanctions and gives other countries a reason to use the yuan.
With all this being said, the yuan isn't replacing the dollar anytime soon. Only a small percentage of global payments and reserves are in yuan. The dollar is still dominant, and that's why China is pushing for other countries to issue yuan-denominated bonds, along with using their new digital payment systems. Overall, China is more focused on creating a trade world where there are several strong currencies, and hopefully for China, that includes the yuan.
Article: China is ditching the dollar, fast
European Stocks Are Forecast to Rise 5% After 'Stellar" Start
The European stock market had a strong start to 2025, their equities on the Continent initially have been outperforming the United States. Although, the STOXX 600 index of large European companies has nearly flat lined since March. It has been weighed down by weak corporate warnings and higher valuations. Goldman Sachs Research forecasts the STOXX 600 will rise about 5% to 580 over the next year (as of September 1). They are predicting a 12-month total return, including dividends, of 8%.
European's equities are relatively more expensive now then they were at the beginning of 2025. The forward price/earning ratio has risen to 14.4. This number puts European equities in the 70th percentile of there historical value range which goes back to the year 2000. The European stocks are expensive in absolute however they are still cheaper than U.S. stocks.
Sachs expects the euro to about 7% to 1.25 versus the American dollar over the next year. This would lead to a significant drag on European companies' as the relative value as the relative value of their sales in the US decline. This will result in domestic-focused companies will benefit. The European equity funds are now seeing inflows after having outflows from 2022-2024. The value stocks are outperforming in Europe which is the opposite than the US. Europe's growth stocks are pressured by failing USD, slower US growth, rising trade barrier, and China who is now a competitor, not a growth driver.
https://www.goldmansachs.com/insights/articles/european-stocks-forecast-to-rise-after-stellar-start
Posted by: Chanden
Trump's tariffs are slowly finding their way into consumer prices
U.S. inflation data released in 2025 shows that tariffs are increasingly raising the cost of goods, clothing and auto parts. Prices of apparel, audio products, groceries, new cars, furniture and hardware all grew by anywhere between 0.3%-0.8%. Coffee prices rose 3.6% from the month as is up 20.9% from a year ago. These prices may not seem to sound dramatic but they are enough to give both consumers and federal reserve policymakers at least some cause for concern. These tariff price pressures are hurting consumers at a time where the labor market is already showing signs of concern.
Economists believe that these tariffs are hitting the middle class the hardest for their basic necessities like gas, food, clothing and housing as their continues to be a rise in cost. Trump stated that he believes the tariffs wouldn't drive inflation higher. Over the next couple of weeks, central bank officials are set two meet whether to lower their key overnight fund rate, currently around 4.3%. While the tariff driven price increase in these goods are very concerning they could just be temporary. Along with that, the federal reserve cutting rates might provide short-term relief to borrowers and keep growth moving.
https://www.cnbc.com/2025/09/11/trumps-tariffs-are-slowly-finding-their-way-into-consumer-prices.html
BlackRock Seeks to Tokenize ETFs After Bitcoin Fund Breakthrough
Olga Kharif, editor at Bloomberg Media, has written an article discussing BlackRock, the worlds largest asset manager exploring a revolutionary new use for blockchain and tokenization. BlackRock is exploring the possibility of tokenizing ETF's and listing them on the blockchain. This idea would revolutionize the way that exchange traded funds are traded, moving them into the blockchain era. The benefits of tokenizing assets would allow for easier access to markets, around the clock trading, and creating new uses for collateral across the crypto industry.
BlackRock has been a leader in tokenizing assets, and sees strong potential in the future of the marketplace. In 2024 Blackrock launched BUIDL, a money-market fund which has grown to over $2 billion in value. BlackRock also released a spot Bitcoin ETF, which has become one of the most popular funds of its kind.
There are a lot of regulatory issues that need to be resolved prior to the legalization and broad based acceptance of tokenizing assets. Currently, ETF's settle through traditional clearinghouses whereas Tokenized assets move instantly. Compliance, custody and settlement speed of deals are some of the many problems. BlackRock is moving forward with this new business function because the Trump administration has showed a willingness to test blockchain situated markets in controlled circumstances.
https://www.bloomberg.com/news/articles/2025-09-13/warner-bros-brings-big-win-for-fallen-angel-debt-credit-weekly?srnd=phx-markets
The Hybrid Adoption Continues to Rise as People Step Away from EV
Goldman Sachs has lowered its forecast for global Electric Vehicle adoption. They project that EVs will account for 25% of global sales by 2030 which is down from 28%, and they additionally project that by 2040 EVs will account for 52% which is down from 59%. The main two reasons of this slowdown are the early expiration of EV tax credits in the US, and also regulatory changes in the U.S. and Europe, including relaxed fuel economy standards. However, in China, the strong demand keeps its forecast unchanged. EV sales are continuing to rise their while in North America and Europe EV momentum has slowed.
On the other hand hybrid vehicles are expected to have a gain in market share. Goldman Sachs Research sees hybrid vehicles making a push as they project up to 12% of global sales by 2030 and 9% by 2040 both more than what they were projected in earlier forecasts. This shift benefit your traditional automakers, who can be efficient in producing a mix between hybrids and EVs. As a result of this, profit margins are projected to rise by up to 3 percentage points, which would be around 20 billion dollars in pre-tax earnings.
https://www.goldmansachs.com/insights/articles/hybrid-adoption-to-rise-as-electric-vehicle-momentum-slows
Saturday, September 13, 2025
Consumers Faced Higher Inflation in August as Housing, Groceries Spike
Consumer prices rose more than expected in August, mainly because of higher housing and grocery costs. The Consumer Price Index (CPI) increased 0.4% for the month, bringing the annual inflation rate to 2.9%, slightly above July’s 2.7%. This rise in essential goods means many consumers are feeling more financial pressure, especially as wage growth begins to slow down. The data suggests that the cost of living continues to climb despite earlier signs that inflation might be cooling.
The report comes just before the Federal Reserve’s meeting, where officials are expected to cut interest rates to support a softening job market. Even with slightly higher inflation, markets are predicting a quarter-point rate cut, with more cuts likely later this year. The Fed’s decisions are also playing out against a political backdrop, as President Trump has criticized Chairman Jerome Powell for keeping rates too high and is attempting to remove a Fed board member, a case now heading to the Supreme Court.
Source : https://money.usnews.com/money/personal-finance/articles/consumers-faced-higher-inflation-in-august-as-housing-groceries-spike
Friday, September 12, 2025
Deflation in Asian Economies
As American inflation is rising, Asian inflation (except for Japan and Bangladesh) has fallen. In fact, prices in both China and Thailand are falling, many other countries within Asia are also falling. My own personal theory going into this article was that the Tariffs are playing as a demand shock, which gives a higher amount of supply, thus making the goods less valuable. However the article contends that firms "frontloaded" shipments before tariffs were in place, where exports to America had widely increased whereas the prices increased moderately compared to G20 countries and started dipping into the negatives as of late.
1. China's overcapacity causing domestic inflation while spreading deflation to countries reliant on Chinese goods. "China’s export-price index has fallen by 15%, even as exports have risen. Although the spillovers are global, Asian economies have probably been hit hardest. Over the same period, China’s goods-trade surplus with developing countries in Asia has almost doubled."
2. Commodity markets for fuel and food have been cooling down. "The decision of the Organization of the Petroleum Exporting Countries and its allies to ramp up drilling has kept oil prices quiescent. Meanwhile, food inflation—which has been high for years because of the war in Ukraine and damage to harvests from hot weather—has subsided."
3. Demand within Asian countries has been weakening over time, while business cycles are not as fruitful as they had hoped.
4. Wage growth within Asia has deaccelerated.
The article does, however, state that the Tariffs (if they are not adjusted or repealed) will further entrench the cooling of inflation.
Source: https://www.economist.com/finance-and-economics/2025/09/01/the-threat-of-deflation-stalks-asias-economies
Tuesday, September 9, 2025
The US Factory spending $100,000 a month more due to tariffs
This article by the BBC examines how industrial towns in the U.S. are experiencing the real effects of tariffs imposed under President Donald Trump. It focuses on a Massachusetts town that once thrived on textile production. Trump's promise was that tariffs would protect U.S. industries from foreign competition, bring back jobs, and restore economic growth. However, this article shows that the policy has produced disappointing results.
Local businesses state that tariffs have raised the costs for materials and disrupted supply chains, making it more difficult to compete. Workers and factory owners voice their frustration with the new tariffs. This article shows the competing visions for America’s economic future. These tariffs appeal to the people who want to protect domestic jobs and punish foreign competitors, mostly China. However, it shows the challenges of implementing these protectionist policies in a globalized economy. For the factory owners in Massachusetts, tariffs have done nothing but harm the industry.
Article Link: https://www.bbc.com/news/articles/c3rvdxz9589o?accountMarketingPreferences=off
Monday, September 8, 2025
Fed Signals Rate Cuts Ahead as Tariffs Shift Growth Dynamics
New York Fed President John Williams recently suggested that interest rate cuts could be on the horizon if inflation continues to cool and unemployment edges higher. Projections now show inflation dropping from around 3% this year to the Fed’s 2% target by 2027, with GDP growth forecast to slow to roughly 1.25–1.5% next year. While tariffs have added about 1–1.5% to inflation, Williams emphasized that the Fed remains “data-driven” and will adjust gradually.
This outlook highlights the balancing act facing policymakers. Rate cuts may ease borrowing costs and support growth, but the effects of tariffs, higher prices, and international trade frictions add uncertainty to the mix. With global demand uneven and job growth slowing, the Fed’s next moves could determine whether the economy maintains steady growth or risks sliding into a more prolonged slowdown.
Article: Fed's Williams sees gradual rate cuts but lets data drive when they'll happen by Michael S. Derby
Link: https://www.reuters.com/business/feds-williams-sees-gradual-rate-cuts-lets-data-drive-when-theyll-happen-2025-09-04/?utm_source=chatgpt.com
Why the private sector can’t replace U.S. government data
A very timely discussion about why the private sector cannot collect information in the same way as the government can. This ties nicely into our discussion of perfect markets where information is necessary for the efficient functioning of markets. Private firms can and do provide some statistics, but the article argues that many area are neglected by the private market. One can classify this as an example of positive externality where a social benefit of information is greater than the private benefit to a firm generating the information. Hence, we would expect that information would be undersupplied and overpriced compared to a situation where firms could capture the externality. Perhaps that is a justification for the government to provide information.
Sunday, September 7, 2025
The Myth of American Deindustrialization
Manufacturing in the United States has fluctuated in recent years, as US-based businesses moved labor-intensive manufacturing overseas. These are profit-driven changes to produce low-cost goods for low-income households. Recently, the POTUS has debated the security behind industrial supply chains and wants to "bring factories back" to the United States. Data released by the US Bureau of Economic Analysis (BEA) estimates that by 2024, stock in US direct investment in manufacturing abroad was $1.1 trillion. While China was estimated to run at $200 billion. This is because overseas industrial operations are not included in national accounts and could be the reason why US-based workers felt these consequences more than the US stock markets.
If we try to bring old manufacturing back to the US, it will only hurt the American people. It was a smart move for the US to abandon manufacturing when we did. As technology advanced, the employment per output shrank dramatically. During Germany's run as a top manufacturer, it only saw a rise in unemployment numbers. As higher-value goods were being produced by robots, fewer workers were needed for their skills. Will large American corporations continue production internationally, or will trade tensions bring labor-intensive manufacturing back to the United States? Who will be the most affected by these changes??
https://www.project-syndicate.org/commentary/us-manufacturing-globally-dominant-deindustrialization-a-myth-by-jorge-arbache-and-otaviano-canuto-2025-09
Wall Street sees September rate cut as sure thing — CPI inflation data will have much to say about what comes next
Markets are bracing for September to be the month that the Fed decides to cut the interest rates after the weakest jobs data in years was reported for August. There was just a 22,000 payroll rise, and traders see a 100% chance of at least a 25-basis point cut and even some odds of a 50-basis point move. This is a signal of how quickly the opinions have shifted to the thought that the labor market might be cooling down. Fed officials are still claiming that the upcoming CPI will be crucial in determining how to adjust the pace of the cuts. Investors feel that with soft labor data and sticky service inflation, the picture and indicate a drop in interest rates.
In the longer-term tariff, related price pressures pose a key risk. More analysts warn that if more of the tariff impact filters through to consumer prices, core inflation could remain above the Fed's 2% target. This would limit how far policymakers can go. Markets have penciled in multiple cuts into 2025-2026; however, these cuts may be overly optimistic. Gradual cutting should support the equity markets in the short term, given the weak labor data and persistent inflation that will define how aggressive the Fed can be.
Thursday, September 4, 2025
What the Rates of Workers Switching Employers or Holding Multiple Jobs Can Tell Us
The St. Louis Fed recently analyzed how the portion of American workers who work multiple jobs has changed since the pandemic. During the COVID-19, the rate of people working multiple jobs dipped to around 4%. This was significant because this was historically low. Since then, around March 2025, that rate had recovered to about 5.5% which translates to over 8 million people. Alongside that, the number of people working multiple part-time jobs also fell between March and July, which could indicate that some workers returned to full-time roles or quit their part-time employment.
These changes are important and have some implications for the labor market. Rising rates of people holding multiple jobs often indicate financial pressures or when money is tight. On the other hand, it’s important to consider that some of this increase may not be because of financial pressure, but rather done willingly because of life-style changes or related circumstances. At the end of the day, the consistency of millions of people working more than one job highlights the current challenges in the economy and home income.
Tuesday, September 2, 2025
Markets Stumble Out of Long Weekend
With Labor Day weekend coming to a close, the stock market opened September on a weak note. The S&P 500 fell roughly 0.7% and the Nasdaq 100 fell nearly 1% after large tech stocks pulled back. Nvidia was one of the biggest movers, losing 1.5% ahead of the market opening. Investors are worried about high-tech valuations and increasing U.S. government debt.
It wasn't just stocks under pressure; global bonds also sold off, pushing yields higher. The U.S. dollar posted its biggest one-day gain (about 0.9%) since July, following a six‑day losing streak. This was due to better-than-expected manufacturing data. Gold rose to an all‑time high of over $3,500 an ounce as investors expect possible interest rate reductions this month.
Van Vuuren, A. J. (2025, September 1). Stocks fall as rising yields stir investor jitters: Markets wrap. Bloomberg. https://www.bloomberg.com/news/articles/2025-09-01/stock-market-today-dow-s-p-live-updates
Monday, September 1, 2025
The economy rebounded and has grown 3.3 percent in the second quarter
U.S. Economy Rebounds in Second Quarter 2025
The U.S. economy showed a strong rebound this spring, bouncing back from a weak first quarter that was largely attributed to the Trump administration’s escalating of trade wars. According to the Commerce Department, gross domestic product (GDP) expanded at a 3.3% annual pace from April through June, an upward revision from the initial 3% estimate released in July.
This follows a difficult start to the year, when GDP contracted by 0.5% in the first three months of 2025. Economists largely blamed this downturn on a surge in imports as businesses rushed to stock up on foreign goods ahead of Trump’s tariffs. Since imports are subtracted from GDP, this created a temporary drag on growth.
In the second quarter, however, the trend reversed, imports fell at a 29.8% annual pace, boosting GDP growth by over 5 percentage points. While this provided a temporary lift, some economists caution that it does not necessarily signal long-term economic strength.
President Donald Trump holds charts as he speaks about the economy in the Oval Office of the White House, Aug. 7, 2025, in Washington.
Q2 growth looked strong on paper, but most of it came from a one-time collapse in imports. Consumer spending is improving, but weak investment and shrinking government spending still suggest that more challenges may be ahead.
source: https://www.usnews.com/news/business/articles/2025-08-28/us-economy-grows-3-3-in-second-quarter-government-says-in-second-estimate-of-april-june-growthGlobal Music Industry Faces Slower Growth but Promises Long-Term Potential
Last year the global music industry grew significantly less than it did in 2023, growing only 6.2% compared to 15.6%. Despite these current setbacks, analysts from Goldman Sachs are very optimistic about the future economic growth in the music industry. These projections are very bold, as Goldman Sachs is projecting that the industries revenue is going to almost double in the next 10 years reaching a new milestone of 200 million. However, this report explained that the path to reaching 100 million in 2024 is going to be a lot different in the next decade.
There are going to be a lot of key factors that change the way the music industry generates revenue within the next 10 years. Emerging streaming markets that are specific to Africa, Asia, and Latin America are expected to develop as internet access in these areas grows a new wave of subscribers will join. Additionally an integration of video content is expected to arise as streaming services will make music videos, live sessions, and even interactive experiences. Lastly, new monetization models will surface giving artists more profit while increasing the engagement of the fans. Overall, even with a down year in growth for the music industry, experts believe with emerging streaming markets, new video content and monetization models the music industry will go nuclear in the next decade.
https://www.goldmansachs.com/insights/articles/global-music-revenues-are-forecast-to-double-to-200-million-in-2035
Germany issues with higher inflation and unemployment has reason for concern
Germany, like much of Europe, is having a huge issue with unemployment and inflation issues in their economy this summer. Germany's inflation rose higher than expected to 2.1% in August while in July it rose at a much better 1.8% .During this core inflation, which strips out the food and energy inflation stayed at steady 2.7% while unemployment rose much higher with it reaching 6.4% which is well above where they want to be. These pressures are being compounded by wider issues of the newly implemented U.S. tariffs, which could have an even worse affect in the months ahead.
The U.S and EU struck a trade agreement in July, which included a 15% tariff rate on much of the exported goods into the U.S. economy. This has a huge affect on Germany because of their highly export-driven economy which could cause an overcapacity at home, lowering the prices of these goods. These decisions have already contracted the country's GDP expanding by 0.3% in quarter one, and then contracting by 0.3% in the next period. The full impact of the tariffs remain very much uncertain, but they could cause the Central Bank to consider cutting rates at their next couple of meetings.
https://www.cnbc.com/2025/08/29/german-inflation-august-2025.html
Core inflation rose to 2.9% in July, highest since February
President Trump has pursued aggressive trade policies such his inauguration, including the imposition of widespread tariffs. The Trump administration has argued that these measures would rebalance trade relations and kickstart the American economic growth. However, the ripple effects of these tariffs are now being seen in inflation data, specifically the personal consumption expenditures (PCE) price index. In July, core inflation rose to a 2.9% annual rate, a 0.1% increase from June and the highest annual rate since February. While this is in line with the forecasted rate, this increase signals that the tariff related costs are making their way to consumers.
This places the Federal Reserve in a challenging position. With the inflation above 2%, the central bankers benchmark and concerns surrounding the job market growing, the federal reserve could still cautiously cut rates. The strength of the labor market will be the determining factor for rate cuts as stated by Morgan Stanley's Ellen Zentner, with the odds stilll favoring a September cut.
In order to avoid long term strain on the market, policymakers may have to offset the effects of the tariffs with incentives or other targeted relief. Without this, consumers could continue to bear the brunt of the higher prices due to the elevated inflation rates and economic momentum could slow.
Source: https://www.cnbc.com/2025/08/29/pce-inflation-report-july-2025.html
Here’s how the U.S. Open’s signature Honey Deuce cocktail price stacks up against inflation
The Honey Deuce cocktail, the US Open's signature cocktail, is becoming pricier by the year for tennis fans in New York. The drink, consisting of vodka, lemonade, and honeydew "tennis balls," now sells for a whopping $23. This price is 53% higher than what it was selling for in 2015. Inflation and the increase in the average price of alcoholic drinks are the main factors driving this price increase. If its price had simply kept pace with the Consumer Price Index, the Honey Deuce would cost just over $20 today. Despite six price hikes since 2012, the drink remains a staple of the tournament, served in a souvenir cup and symbolizing the fan experience at one of tennis’s biggest stages.
Even with its steep cost, demand has only grown. More than 550,000 Honey Deuces were sold in 2024, generating nearly $13 million in revenue. This revenue is more than the combined earnings of the tournament champions! Economists point to “funflation” as part of the explanation, which explains how people are willing to pay premium prices for memorable experiences, whether that’s concerts, travel, or sporting events. Overall, the cocktail has become more of a tradition than a good for spectators looking to enjoy the US Open.
Source: Honey Deuce: Here's how U.S. Open's signature cocktail's price stacks up against inflation
Trump’s immigration policy threatens key sectors of California’s economy, long reliant on immigrant workers
Since taking office, President Trump has been adamant on enforcing immigration laws. His claims backing the controversial methods of expelling immigrants include improving the wages and cost of living for American-born citizens. Nevertheless, the American economy relies significantly on the inclusion and incentivization of immigrant workers. California, specifically, boasts a large immigrant portion of its labor force mostly in the agriculture, construction, and hospitality sectors. For instance, 63% of California's agriculture labor force is immigrants with nearly a quarter of them being undocumented.
While a decrease in the amount of workers would increase the wages for American-born workers, overall productivity of the economy would decrease and GDP would likely fall. It is estimated that California could lose a potential $278 billion in GDP if the current pace of deportations continues. In this issue, we see the intersection of political policy and a nation's economic system. In the long run, labor shortages would likely return to a sustainable level but overall output may increase at a slower rate. Another alarming facet of this issue is the skills in the labor force. If a political administration decides to enforce stricter immigration laws, and immigrants make up a majority of these "blue-collar" industries, then there should be some incentivization in the short turn for domestic workers to pursue these jobs. Wages and salaries will entice this labor force; however, these will remain sticky in the short-term. Government policy makers should consider incentivization programs such as stimulus checks, debt forgiveness, or other benefits to solve what could potentially be a dramatic labor shortage.
https://www.cnbc.com/2025/09/01/trump-california-newsom-immigrant-workers.html
Cook to sue Trump over order to fire her from Federal Reserve
President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, one of seven members of the Fed’s Board of Governors. Trump claims she made false statements on mortgage documents.
Cook responded by stating that she would not resign and would be pursuing legal action. The push to remove Cook highlights the broader pattern of pressure by Trump on the Fed as he also publicly expressed frustration with the Fed’s reluctance to aggressively cut interest rates. If this removal is upheld, it could weaken the institutional autonomy of the Fed, allowing for even more executive political influence over monetary policy. The uncertainty from this action could unsettle financial markets.
Article link: https://www.bbc.com/news/articles/cx275n8gx0ro
How the Fed losing its independence could affect Americans' everyday lives
Dangers to Average Americans If the Fed Is No Longer Independent
President Trump's attempt to remove Fed Governor Lisa Cook, the first such removal attempt in the Fed's 112-year history, has prompted economists to warn that the Fed's independence is seriously threatened.
The Fed may be under pressure to cut short-term rates, which could lead to higher inflation and ultimately higher interest rates on mortgages, auto loans, and business credit.
Independent central banks are crucial because they are freed from political pressure to make tough choices that ultimately reduce inflation. Politically controlled Feds have the potential to overstimulate the economy and ultimately lead to instability.
The U.S. economic system may move away from market-driven capitalism and toward a model where monetary policy is more politically determined if the Fed loses its independence. This would erode the checks and balances in place to prevent unchecked inflation by blurring the distinction between monetary and fiscal policy. In time, this might:
Undermine confidence in the dollar as a reliable worldwide reserve currency.
Reduced confidence in investments as companies worry about unpredictable, politically driven rate changes.
Change the government-market power dynamic so that politicians have more influence over economic cycles, rather than the Fed serving as a stabilizer.
To put it briefly, the United States would risk shifting from an economy based on rules, where predictability is provided by independent institutions, to one that is susceptible to transient political agendas.
Kenya Airways’ Financial Struggles
Kenya Airways, often dubbed the “Pride of Africa,” has faced significant financial turbulence in 2025. The airline reported a pretax loss of 12.17 billion shillings (about $94 million) in the first half of the year, a dramatic reversal from a 634 million shilling profit recorded in the same period in 2024. This shift underscores not only operational challenges but also structural vulnerabilities within the national carrier.
A major factor behind the losses was the grounding of several Boeing 787-8 aircraft, which disrupted passenger operations and limited the airline’s ability to serve profitable long-haul routes. This technical setback reduced passenger numbers and slashed revenue during a period when global demand for air travel has been steadily recovering. High maintenance costs, coupled with fluctuations in global fuel prices, further squeezed margins.
In response, Kenya Airways has set an ambitious plan to raise at least $500 million in new capital by early 2026. The strategy centers on fleet modernization and expansion, which the airline views as critical to regaining competitiveness against regional and global rivals. By upgrading to more fuel efficient aircrafts and expanding their routes, they hopes to boost passenger numbers, cut operating costs, and reposition itself as a major hub carrier in East Africa.
Sunday, August 31, 2025
The Key to Africa's Economic Integration
African businesses have been struggling to keep up with the regional markets. The presence of previous colonialism has kept small and medium enterprises from expanding. This has created a halt in Africa's economic integration, as international trade and associated risks have continued to arise as an issue for trade finance stability. There have been small steps taken to increase intra-African trade by the implementation of the African Continental Free Trade Area (AfCFTA), which has a goal to reduce tariffs and non-tariff barriers. Since 2021, 49 countries have approved and continued to follow the removal of intracontinental trade barriers; thus, intra-African trade reached $192.2 billion by December 2023. Documenting a $5.9 billion increase since 2022, showing a positive increase in trade finance initiatives.
Economists have put together a strategic list of initiatives to help African countries compete in global markets and support the growth of sustainable development. Investments in financial ecosystems could look like more infrastructure in roads, digital networks, and ports. However, based on findings from Afreximbank, the investment would have to amount to $130 - $170 billion annually to meet their fullest economic potential. There needs to be a movement towards partnerships with private-sector actors and development-finance institutions and the African government. If private investments had lower risk rates and access to concessional finance, there could be real change within Africa's economy.
Article: https://www.project-syndicate.org/commentary/trade-finance-key-to-africa-economic-integration-growth-by-gwen-mwaba-2025-08
Why Netflix and Spotify Keep Raising Prices
Spotify followed a similar path, expanding Premium price increases across much of Europe, Africa, and Latin America, moving the monthly cost from €10.99 to €11.99. These changes show the financial pressure facing major platforms and how dependent they are on customer loyalty to absorb additional costs. It also raises a bigger question about demand: how much longer will people accept paying higher prices before deciding that the cost no longer matches the value of what they’re getting?
https://www.theverge.com/2025/1/21/24348682/netflix-price-increase-earnings-q4-2024
https://www.barrons.com/articles/spotify-stock-prices-wall-street-213d4480
Japan’s economy grows at a 1% pace in the last quarter despite Trump’s higher tariffs
https://apnews.com/article/japan-tariffs-trump-economy-gdp-4ed873e4162c84dafc3befc81b49c6e6
In the most recent quarter, the Japanese economy grew 1% better than expected and was primarily boosted by exports. This comes despite the tariffs that were implemented by President Donald Trump. The U.S. imposed a 15% tax on all imports from Japan. However, this is a drop in tariffs for some products that were being taxed at 25%. The tariffs of 15% are still higher than the tax before the tariffs, but the drop from 25 to 15% enables more growth opportunities. Japan's GDP grew 0.3% compared to the previous fiscal quarter, which beat the analysts' estimations. Japan has experienced 5 straight quarters with fiscal growth, and a lot of the growth can be attributed to the 90-day break in tariffs, which allowed for businesses to rush ship products. This increased the country's exports by 2% during the break in tariffs.
The growth can also be attributed to the increased number of tourists visiting, which has helped economically by boosting economic growth. However, there has been a sense of resentment among residents as they now have to deal with more foreign visitors and the aspects that come with that. In addition, capital investment increased by 1.3% which is helping drive growth at a faster rate, but consumer spending remained weak at a 0.2% growth. With there being growth seen in the economy, Japan's central bank may go ahead to raise the benchmark interest rate to help cap inflation.
The Sluggish Renaissance of U.S. Manufacturing
Due to shifts from a manufacturing market to a service industry in the economy, the manufacturing industry has seen a downward trend in employment rates and its portion in its sector. As of the end of 2024, there are roughly 12.6 million people employed in the manufacturing business. This takes up around about 9.3% of total private sector employment. For reference, in 1960, manufacturing took up a sound 33.7%. In more recent years however, these numbers have stayed consistently around 12 million people, defying the constant downward trend in the past.
Manufacturing employment has been slowly recovering, pushed by an upswing in the number of manufacturing facilities. Over the past decade, manufacturing employment grew by 5% (roughly 12.6 million people) and facilities grew 19% (roughly 401,000 facilities). About half of the sector’s increase in employment over the past 10 years was driven by the food manufacturing subindustry. That subindustry also contributed the most to the increase in manufacturing establishments during this period.
source: https://www.stlouisfed.org/on-the-economy/2025/aug/sluggish-renaissance-us-manufacturing
Economy U.S. economy expanded 3.3% in Q2, with growth even stronger than initially thought
A recent analysis shows that the United States economy expanded 3.3% in Q2. This was a growth that was stronger than which many thought. Gross Domestic Product rose 3.3% in the quarter 2 period from April to June. The U.S. consumer spending rose to 1.6% with the initial estimate being 1.4%, this helped pushed the higher number. Critically, a measure called final sales to to private domestic rose to 1.9%, this was an increase from the previous number of 1.2%. The Federal Reserve watches this closely from the indication of demand and sales that occur within the United States borders, this is extremely important taking in the consideration of the uncertainty impact that Trump's tariffs create.
In the first half of this year GDP has grown 2.1%, which is about a 1% increase in each quarter. The economy contracted 0.5% in the first quarter which was largely impacted by the rush of imports. Although, there is some good news. Consumption of American's is higher than what was originally thought to be. American's are still willing to spend regardless of the uncertainty and tariffs. Heather Long, the chief economists at the Navy Federal Credit Union stated, “Going forward, the economy is likely to stay in this slower speed mode with spending and growth around 1.5% as the tariffs become more visible to American consumers.”
With the first couple months of the third quarter in the books the economy is growing at a 2.2% pace in Q3.
Source: https://www.cnbc.com/2025/08/28/us-economy-grew-3point3percent-in-q2-growth-was-stronger-than-initially-thought.html
Posted by: Chanden Lee at 8/31/2025 12:24:00PM
Saturday, August 30, 2025
Trump tariffs that are voided by; and ones that are safe from Friday’s appeals court ruling
A federal appeals court just ruled that most of President Trump’s “reciprocal tariffs” are illegal because he went beyond his legal power as president. These tariffs were huge. They covered almost 70% of U.S. imports and charged other countries, like Mexico, Canada, China, India, and Brazil, up to 50% on goods. The court said only Congress can create taxes like tariffs, not the president. For now, the tariffs will stay in place until mid-October while Trump appeals to the Supreme Court. If the Court agrees with the ruling, Trump can still put tariffs in place but only in smaller amounts and for shorter time periods using a different law.
Some of Trump’s tariffs are still safe. His taxes on steel and aluminum (called Section 232 tariffs) are not affected by the ruling and were recently expanded to cover more products. These tariffs are likely to stay even if the Supreme Court removes the bigger ones. Other tariffs that started during Trump’s first term on China also remain, along with a new rule that removes the $800 “free pass” for small imports, meaning even cheap goods from overseas now face extra costs. This all means Trump might shift to using more focused, industry-specific tariffs instead of taxing almost all imports.
This case shows how economic policy is shaped by the balance of power between the president, Congress, and the courts and how trade policy can have big effects on global markets and domestic businesses.
Source : https://www.cnbc.com/2025/08/30/trump-trade-tariffs-appeals.html
Tame US Job Growth Expected in Approach to Fed Meeting
Vince Golle and Craig Stirling, Journalists at Bloomberg, Discuss US Job growth expectations, along with payroll expectations, and international trade effects in this article. Bloomberg analysts are expecting hiring to remain limited as Bloomberg is projecting 75,000 jobs added in the month of August, while unemployment to tick up to an almost four year high. If this ends up being the case this would mark the slowest payroll growth since the throes of the COVID pandemic in 2020. Since August of 2022, the US unemployment rate has consistently risen from 3.6% in August of 2022 to 4.3% currently, and Bloomberg analysts are expecting unemployment to continue to tick higher in August.
Trade tensions internationally were a theme of this article. Golle and Stirling demonstrated Trumps trade policy affects on other countries/regions. Canada saw its first GDP contraction in nearly two years this past fiscal quarter, showing the negative effects that Tariffs have on Canadas largest trading partner.
Economists predict steady growth in Australia, and muted growth in South Korea, both countries will report many various fiscal reports in the coming week. Japans trade exports have reached an all time low in the past 15 months with exports down to -2.6% for the month of June, a stark contrast to the 12% surge in February.
across the EMEA conditions are relatively stable. No important monetary policy changes are expected at the upcoming ECB meeting in September. Inflation remains steady, and near the ECB's target of 2%. A notable statistic will be the German Factory order draws which may add some key insight to US tariff effects on German and European manufacturing.
Article Link: https://www.bloomberg.com/news/articles/2025-08-30/tame-us-job-growth-expected-in-approach-to-fed-meeting?srnd=phx-economics-v2
Wednesday, August 27, 2025
US Tourism Industry in Tour-moil
The Economist raises the issue that due to all the bad publicity in regards to the Trump administration, that foreigners are avoiding trips to the USA -- therefore causing the tourism industry to suffer. The world has been seeing the Administration harming various apartments, putting alliances into question, increased deportation, and sending the national guard into cities. Therefore causing foreigners not wanting to visit the USA.
"With most of the summer season now visible, the trend is harder to miss. Using data from America’s International Trade Administration, a government agency, The Economist finds that foreign arrivals at American airports are down by 3.8% compared with 2024, or 1.3m fewer people. The slump was steepest between May and July, when arrivals fell by 5.5% year on year. That bucked the global trend as tourism finally recovered to pre-pandemic levels."
This is in sharp contrast to Americans departing for travel on a year to year basis, which is up nearly 3%. " In 2024 some 22% more Americans flew abroad than foreigners came in; this year so far the gap has widened to 27%."
Source: https://www.economist.com/graphic-detail/2025/08/26/have-foreign-tourists-really-avoided-america-this-year
Tuesday, August 26, 2025
Cracks in the Entry-Level Job Market for Gen Z Graduates
A recent analysis shows that in July 2025, 13.4% of unemployed Americans were new labor force entrants, the highest share since 1988, highlighting the strain on the job market for newcomers. Despite the overall U.S. Employment rate holding at around 4.2%, this spike among job-seekers entering the workforce signals a deepening challenge for those without prior experience.
This sharp entry-level squeeze suggests that the traditional college premium —the idea that earning a degree nearly guarantees an employment advantage —is under growing pressure in today's economic climate. As hiring slows and employers become more cautious, even well-educated newcomers find their path into the labor market blocked by low turnover and a freeze on entry-level roles.
Article: Gen Z Grads Are Entering The Toughest Job Market In Decades by Allwork.Space News Team
Link: https://allwork.space/2025/08/gen-z-grads-are-entering-the-toughest-job-market-in-decades/
Monday, August 25, 2025
July Jobs Report Reveals Cracks in the College Premium
The July 2025 jobs report shows an abrupt slowdown in the United States labor market. The payroll increased at only an average of 35,000 new positions over the past three months, and the unemployment rate ticked up to 4.2%. The figures may appear insignificant, but they represent an actual shift from the improved labor market of 2019 and the rebound from the pandemic.
Younger graduates are hit the worst, with 23–27-year-old unemployment rising from 3.25% in 2019 to 4.59% in 2025—a 1.34 percentage point rise, more than double that of other groups. This suggests that the traditional college degree labor market premium is in decline. White-collar employment is also hit, particularly in fields like computer science and media, where unemployment has climbed steeply. The changing labor market is raising questions about stability, education, and employment.
Ozkan, S., & Sullivan, N. (2025, August 25). Recent college grads bear brunt of labor market shifts. Federal Reserve Bank of St. Louis. https://www.stlouisfed.org/on-the-economy/2025/aug/recent-college-grads-bear-brunt-labor-market-shifts
Sunday, May 4, 2025
April US payrolls growth slows before full tariff impact felt
This article breaks down how job growth in April had slowed down. There were 177,000 less jobs added than in March but it was still better than expected. The unemployment rate stayed at 4.2%, so the job market’s holding steady for now. But the real concern is what’s supposed to be coming next. With Trump’s proposed tariffs still in place a lot of businesses are going to be forced to have to less hiring and less investment across the board. Right now though things don’t look too bad but you can definitely feel the uncertainty. The Fed isn’t changing interest rates yet, but if inflation or the job market shifts, that could change too. It feels like we’re in this calm before the storm, and how the tariff situation plays out could really tip the balance either way.
Tuesday, April 29, 2025
India could have its ‘Latin America moment’ amid ongoing US–China trade war, says Richard Baldwin
In the article "India could have its ‘Latin America moment’ amid ongoing US–China trade war" from The Indian Express, economist Richard Baldwin draws a historical parallel between Latin America's post-World War II industrialization and India's current economic opportunity. He suggests that, much like Latin America capitalized on Britain's declining manufacturing dominance, India can now leverage the US–China trade tensions to integrate more deeply into global supply chains.
Baldwin recommends that India adopt World Trade Organization-compliant measures to prevent the dumping of Chinese goods, a potential consequence of the trade war. Simultaneously, he emphasizes the importance of India pursuing additional trade agreements, noting that while the US accounts for only 15% of global imports, the remaining 85% presents significant opportunities for Indian exports. By strategically navigating these dynamics, India could enhance its role in global trade and manufacturing.