Global Economy Braces for Slowdown: A Seismic Shift for Commodity Markets

As the world starts to show signs of a global sustained slowdown, caused by persistent inflation and aggressive monetary tightening by large central banks, commodity prices are falling to six year lows.  While this slow down and reduced demand are affecting some commodities more than others, there are a select few that are actually thriving, such as green energy commodities like copper, aluminum, lithium, and silver.  

If this reduced demand for certain commodities persist it could lead to supply chain issues in the long-run, leading to a potential variety of scenarios, such as a more synchronized global slowdown causing an even steeper price decline, a gradual slowdown with a larger gap in the old and new economy metals, a strong return in demand forcing prices up and global inflation to rise, and a "Great Divergence" in the different commodities due to the increased supply and decreased demand.

Moving forward, the commodities market will be uncertain and volatile, as the production of commodities becomes more expensive and the price decreases.  Investors should be looking at more commodity-based indicators now than in the past as commodity supply and demand influence the global market.

https://markets.financialcontent.com/wral/article/marketminute-2025-12-15-global-economy-braces-for-slowdown-a-seismic-shift-for-commodity-markets

Trump wants his Fed chair to cut rates. The economy may have other ideas.

 With a Fed decision coming today, Trump has consistently insisted on another cut and has done so by criticizing Powell. This comes as a growing debate over political interference into the Federal Reserve and its decisions. 

Fed policymakers are divided over the best path forward - some warn that more and more rate cuts will come with a sharp rise in inflation rather than stabilize the economy. Some believe it is the right path forward and that the economy is stable and ready to handle another cut.

https://www.politico.com/news/2025/12/10/trump-wants-his-fed-chair-to-cut-rates-the-economy-may-have-other-ideas-00684205

Trump administration moves to remove millions of student loan borrowers from payment pause

     The Trump administration has reached a deal with Missouri that could cause a lot of borrowers to get back into repayment. Since the courts blocked Biden’s SAVE plan, the Education Department says anyone still in that forbearance will now have to pick a new repayment plan. 

    Republican-led states argued SAVE was a workaround for student loan forgiveness. With more than 7.6 million people in the program, the shift could create major stress and changes for borrowers who’ve relied on the lower payments SAVE offered.

Article: SAVE student loan payment pause: Trump officials seek to end relief

Tariffs, AI boom could test global growth's resilience, OECD says

 Global economic growth is holding up better than expected, according to the OECD. A major reason is the global boom in artificial intelligence investment, which is helping balance out the negative effects of recent U.S. tariff increases. The OECD now expects global growth to be 3.2% in 2025 before slowing slightly to 2.9% in 2026. The U.S., China, and the eurozone all received small upgrades in their growth forecasts, supported by strong labor markets, AI investment, and government spending. However, the OECD warns that new trade tensions or unrealistic expectations about AI could threaten this resilience.

Despite the positive outlook, the OECD highlights several risks. U.S. tariffs could become more damaging as companies run out of inventory, and America’s rising budget deficits are considered unsustainable. China’s growth is expected to slow in 2026 as U.S. tariffs tighten, and global trade growth is predicted to weaken due to uncertainty. Inflation is expected to ease gradually, allowing central banks like the Federal Reserve to begin cutting interest rates by late 2026. Overall, the world economy is proving surprisingly resilient, but still vulnerable to policy mistakes and trade conflicts.

Oil Prices Jump: Why It Matters for the Economy

 

A major recent economic event has been the sharp rise in global oil prices, which climbed after supply cuts from major producers and renewed geopolitical tensions. This jump has immediate effects on both consumers and businesses, making it one of the most closely watched developments in the economy right now. Higher oil prices quickly feed into gasoline and transportation costs, which raises expenses for households and increases operating costs for companies that rely on shipping, trucking, or air travel. This can push inflation slightly higher again at a time when policymakers are trying to cool it down.

Financial markets also reacted, with energy stocks rising and broader market indexes showing more volatility. Economists warn that if oil prices stay elevated, it could slow consumer spending and weaken economic growth in the coming months. Overall, the recent spike in oil prices serves as a reminder of how connected global energy markets are to everyday economic activity. Even a short-term increase can influence inflation, business decisions, and the pace of economic recovery.

https://www.reuters.com/business/energy/oil-falls-investors-weigh-chance-us-intervention-iran-israel-conflict-2025-06-19/?utm_source=chatgpt.com

Utah Governor Calls a Legislative Special Session to Repeal Public Employee Collective Bargaining Ban Signed Into Law Earlier This Year

 

Utah Governor Calls a Legislative Special Session to Repeal Public Employee Collective Bargaining Ban Signed Into Law Earlier This Year

In February 2025, the Utah Legislature passed H.B. 267, a new law that would ban collective bargaining for public employee unions in the State of Utah. After the passage of the law, there was public backlash with Public employee unions calling for the repeal of the Act through veto referendum, a process that allows for the collection of signatures to put the question to a vote on whether to repeal the Act. 

In May of 2025, the Lieutenant Governor of Utah, Deidre Henderson, announced that there were enough signatures to refer the question to voters, and as of December 7th, Governor Spencer Cox has called a special session for the Utah Legislature to consider repealing H.B. 267, which he signed into law earlier in the year. 

Source: https://www.sltrib.com/news/politics/2025/12/07/anti-union-law-gop-lawmakers/ 

Layoff announcements top 1.1 million this year, the most since 2020 pandemic

            Consulting firm Challenger, Gray & Christmas  reported Thursday that job cuts from U.S. employers moved further ahead of 1 million for the year in November. This is due to corporate restructuring, artificial intelligence and tariffs helping pare job rolls. More than 71,000 job cuts in November, pushing the layoffs for 2025 to 1.17 million which is the highest level since the pandemic. Verizon announced that more than 13,000 jobs have been slashed driven by innovations in AI and tariffs were cited as a driver of 2,000 cuts. This number is much better than the 153,000 cuts announced in October, which was the highest total for the month in 22 years.  

            This firm also stated that companies since the 2008 financial crisis have been trending away from layoffs at the end of the year which is to try and keep layoffs away from the holiday season. As well, private payroll from ADP shows employers cut 32,000 in November which is the decline in more than two and a half years. While AI is clearly accelerating at a pace that industries cannot keep up with it will be interesting to see how they redefine job stability and how these industries will adopt over time. 

https://www.cnbc.com/2025/12/04/layoff-announcements-this-year-top-1point1-million-the-most-since-2020-when-pandemic-hit-challenger-says.html

How to actually feed America

Here is an interesting piece that was shared with me by Prof. Gitter on how food bank system operates. There are clear parallels between the food bank system and economic systems that we have covered in class this semester. Happy reading.

Trump and South Korean Tariffs

 The Trump administration has finalized a major trade agreement with South Korea, leading to a significant reduction in U.S. tariffs on imported goods, including automobiles. The new deal states that the general tariff rate on imports from South Korea will be cut from 25% down to 15%. This reduction was possible due to South Korea fulfilling a commitment within the trade structure by implementing a $350 billion investment package into select American industries.

The tariff reduction is set to deliver a substantial financial boost to South Korean auto manufacturers, most notably Hyundai and Kia, who have seen profits decrease because of the 25% tariffs. Recent forecasts predict the lower rate could save the companies billions, allowing them to improve their business operations.Furthermore, while the agreement softens financial strain to the South Korean economy, the required investment from South Korea into American industries strengthens the economic relationship between the two. 

Source: https://www.cnbc.com/2025/12/03/trump-south-korea-tariffs-vehicles-hyundai-gm.html

Delayed tariff impact starting to hit

Tariffs may result in job losses in 2026.

The newest wave of tariffs is finally showing up in the economy, and a lot of companies are basically saying the same thing: expenses are rising, margins are growing tight, and if this keeps up, they may have to slash employment moving into 2026. When input prices rise and demand falls, payroll is one of the first areas organizations cut to reduce costs.

Manufacturing has already been struggling for several months. Tariffs' increased import costs aren't helpful, and many businesses aren't confident enough to grow or recruit. Some are even prepared for probable layoffs next year if things don’t improve.

The problem is that tariffs affect consumers as well as enterprises. Higher production costs usually translate to higher pricing, and people are already feeling stretched. If customers draw back, that can create a loop of weaker demand and increased pressure on firms to cut costs.

Potential Consequences for 2026. If tariffs keep piling on:

- Hiring might even stall
- There may be layoffs in some industries

- Consumer spending might decrease
- Inflation might continue to be higher than anticipated

Tariffs began as a trade tactic, but they are evolving into something that could actually affect the labor market and the economy as a whole in the coming year.

Link

Shutdown Ends, Uncertainty Continues: How Washington's Standoff Hit the U.S. Economy

The biggest economic story this period has been the end of the record-long U.S. government shutdown. After 43 days, Congress finally approved a funding package on November 12th, and agencies reopened the next morning. Nearly 750,000 federal employees began returning to work, with back pay scheduled to roll out over the following week. While markets reacted with relief, the shutdown created lasting disruptions: delayed economic data, stalled regulatory decisions, and financial strain for households that went more than a month without pay. The deal only funds agencies through late January, leaving another standoff possible, especially as Congress now faces a new fight over expiring health-care tax credits. For now, the economy is moving again, but the uncertainty highlighted how sensitive growth and consumer confidence are to political brinkmanship.

Article: Government shutdown now over as federal agencies reopen and employees return to work By Kaia Hubbard and Caitlin Yilek

Link: https://www.cbsnews.com/live-updates/government-shutdown-latest-trump-signs-funding-federal-agences-opening/

Economy Fed won’t get key inflation data

Bureau employees were unable to gather the data due to the protracted government shutdown. The Bureau of Labor Statistics said it will not release the October CPI report. The Federal Reserve will meet in December without the new inflation data it typically relies on, as November's inflation report is also delayed.

The Fed is in a difficult situation as a result. In the absence of CPI, policymakers would be forced to make a significant interest rate decision without factoring in one of their most crucial indicators. This suggests the Fed will be cautious and wait for more precise information before making bold decisions or lowering interest rates.

We anticipate that the Fed will make specific decisions that impact markets, jobs, loans, and mortgages. However, given that the nation is unable to provide the fundamental flow of information it depends on, how can it accomplish that? It's similar to expecting a pilot to land an aircraft without instruments and then holding them accountable for a difficult landing.

This should serve as a warning. The system needs significant strengthening if our economic data can collapse so readily. This is true not only for policymakers but also for everyone whose everyday lives depend on steady, well-informed decisions. Until then, there will be more market fluctuations, more uncertainty, and more times when those in charge of the economy must work in the dark.

In summary, the missed CPI announcement serves as a reminder of how vulnerable our data infrastructure can be when politics gets in the way, the Fed operates somewhat in the dark, and markets are on edge.

Link: https://www.cnbc.com/2025/11/21/fed-wont-get-key-inflation-data-before-next-rate-decision-as-bls-cancels-october-cpi-release.html

Another Shutdown Affect

 The Bureau of Labor Statistics (BLS) will not be releasing a full jobs report for October, as a result of the shutdown. October payroll data will be released alongside the full November data, but they won’t show Octobers unemployment rate as there was no way to collect it.

With this larger release, they are delaying the November release by over a week. This is significant because the information won’t be available for the final Fed meeting of the year. The article states that traders may be expecting a lower chance of another rate cut as a result of this problem. 

Franck, T. (2025, November 19). BLS October jobs data shows hiring continues, unemployment rate ticks down. CNBC. https://www.cnbc.com/2025/11/19/bls-october-jobs-data.html

South Korea called to become less dependent on the USA

A Singaporean Economist is calling on South Korea to deepen ties with other Southeastern Asian countries rather than the USA to keep as a global trade partner.

"He also criticized the tendency of countries to act individually rather than collectively, citing ASEAN members’ unilateral responses to US tariffs. As a remedy, he proposed “pathfinder multilateralism” — a model in which a smaller group of willing nations establishes new rules or standards without waiting for universal consensus. The idea, he said, is to create coalitions that are “incentive-compatible,” ensuring cooperation holds because interests align."

https://www.koreaherald.com/article/10617826

Trump is right: He lowered some of your costs. But he also made many prices higher

 President Trump has doubled down on his message that prices are falling, especially for groceries, claiming that his economic agenda is delivering affordability. Yet, a closer look at the data reveals a more complicated picture. While he argues that inflation is “virtually none,” government statistics tell a different story: grocery prices are up, not down, and overall consumer inflation has risen during his second term. 

Critics say the administration’s approach risks underplaying the real pain felt by Americans. While some products have seen price relief, others continue to climb, making affordability a deeply uneven issue. This tension between political messaging and economic reality is turning affordability into a central battleground. One that could have serious political consequences as more voters voice frustration over rising costs. 

article: https://www.cnn.com/2025/11/17/business/trump-prices-affordability

Tariffs raise beef prices again

     Recent beef price increases in the U.S. are a good example of how interconnected economic systems are and how policy decisions can create unintended consequences. Trump’s new tariffs on major beef suppliers such as like Brazil, Australia, New Zealand, and Uruguay cut down imports and raised costs, reducing supply the at the exact moment the U.S. cattle herd is the smallest it has been in about 75 years. Ranchers can’t just increase production quickly because drought, high feed costs (made worse by the tariffs on fertilizers), and expensive equipment have already made it difficult to rebuild herds. Since cattle production takes years, the supply chain is slow to adjust. The tariffs didn’t just hit beef imports, they also increased the costs of farming machinery, repairs, and feed which all pushed domestic prices even higher. Meanwhile, global suppliers sent their beef to other countries, tightening the world supply available to the U.S. Even policy attempts to bring in more Argentine beef created uncertainty and caused cattle futures to fluctuate. All of these factors, from climate stress to tariffs to global trade diversion, on top of each other, showing how a single policy choice can ripple through an entire system and ultimately raise prices for consumers while still leaving ranchers struggling.

https://www.cnbc.com/2025/11/13/trump-tariffs-high-beef-prices.html

New York Fed met with Wall Street firms about key lending facility: FT

 The New York Fed recently held a private meeting with its primary dealer firms, Wall Street banks that trade US Treasuries,  due to strains on the short-term funding markets. The main point of the discussion was the standing repo facility(SRF). The SRF is a tool the Fed makes available for firms to swap collateral for cash. The Fed wants to use it more as a buffer against money market disruptors moving forward. 

    The meeting also highlighted growing concern about tight bank reserves and upward pressure on short-term borrowing costs tied to the repo market. Although the SRF exists, many institutions have been reluctant to use it. This is in part because doing so might signal financial weakness, which is never great to see. Overall, the Fed's message is simple: if it makes economic sense, borrow from the facility.

article: New York Fed met with Wall Street firms about key lending facility: FT

‘High stakes, uncertain gains’: Economic experts criticize Trump administration policies

Experts in the economic and finance industry raise questions about the Trump administration's recent policy decisions and their injection of uncertainty and risk into the U.S economy. Aggressive deregulation, trade tensions, and inconsistent messaging, according to economists, put long-term stability and investor confidence at risk. These experts conceded that tax-cuts and reduced oversight have benefitted some sectors; however, they believe that inflation, geo-politics, and market volatility may negate these benefits in the long-run. These actions showcase how government policy has a myriad of effects, both positive and negative, short-term and long-term. 

https://www.studlife.com/news/2025/11/16/high-stakes-uncertain-gains-economic-experts-criticize-trump-administration-policies

Retail Investors Are Reshaping U.S. Markets

 As retail investors play a increasing role in driving United States equity markets, their trading pattern is starting to begin to reshape how stocks move and how volatility surfaces form. In a recent discussion, Goldman Sachs' John Marshall explained that the surge of individual investor activity is creating new dynamics for market makers and institutional investors. This is fueled by options trading, social sentiment, and real time information access. These shifts can generate both challenges and opportunities, these include short term volatility bursts, and differentiated demand for derivatives. While the conversation highlights emerging trends, Goldman Sachs stresses that the views are informational and should not be taken into account for investment advice. 

https://www.goldmansachs.com/insights/the-markets/rise-of-the-retail-investor

September jobs report will be out Thursday as first data since shutdown starts to trickle out

     As the government reopened this week that means that September job reports will become available this Thursday. The Bureau of Labor Statistics (BLS) announced that the real earnings will be out Friday and that the October CPI report may never be produced because the data could not be produced collected in person. They also announced that the unemployment rate excluded because of this as well. Economist say the pause created a "data fog" that has forced investors and policymakers to guess their way through the next couple of months. 

    The political pressure that came of this has been heating up in Washington with a group of Democrat senators pressing the administration for answers. They accused it of dragging its feet on releasing the information that business. They stated " the Trump Administration failure to release data or provide a clear schedule for the release of delayed data leaves businesses and policymakers without access to critical economic information." Agencies like the BLS, the BEA and the Commerce Department are still sorting out what can be salvaged and when delayed reports such as personal income, spending and GDP can be reschedule. The hope for the future is that everything will be under control by the December meetings but only time will tell.  

https://www.cnbc.com/2025/11/14/heres-where-things-stand-on-when-the-government-will-start-releasing-key-economic-reports.html