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    Stocks Drop After Hotter Than Expected Inflation Reading

    Investors are now betting that the Federal Reserve will cut interest rates just once more this year, a drastic shift in expectations since late 2024.Stocks on Wall Street slumped at the start of trading on Wednesday, dragged lower by data that showed consumer prices rose more than expected in January, leaving the Federal Reserve little cause to lower interest rates again soon.The S&P 500 fell roughly 1 percent as trading got underway. The Nasdaq Composite index, which is chock-full of tech stocks that have come under pressure recently from rising global competition to develop the chips that will power the development of artificial intelligence, also fell around 1 percent.Fresh inflation data from the Bureau of Labor Statistics on Wednesday showed that prices rose 3 percent for the year through January, up from 2.9 percent in December. The “core” Consumer Price Index, which excludes volatile food and energy prices, rose 3.3 percent year-over-year.Signs of continuing price pressure is likely to encourage the Fed to refrain from further interest rate cuts in the coming months. For stock investors, higher interest rates means slower business activity, which can weigh on companies’ earnings and stock prices.The uptick in inflation in January “does not derail the longer-term downward trend in inflation,” said Kyle Chapman, a foreign exchange market analyst at Ballinger Group. But, he said, “it does reaffirm the consensus that cuts are going to come much more slowly than we had thought towards the end of last year.”Investors are now betting that the Federal Reserve will keep interest rates at their current level until December. It’s a drastic shift in expectations since last year, when traders were expecting as many as four cuts for 2025, and even just a few weeks ago investors expected the next cut in rates as soon as June.The two year Treasury yield, which is sensitive to changes in investors’ interest rate expectations, rose sharply after the inflation report, up 0.1 percentage points to 4.36 percent, close to its highest level of the year.Wednesday’s drop comes after a bumpy three weeks for traders, with whipsaw swings in stock prices reflecting investors’ struggle to parse the flurry of executive actions taken by President Trump since he returned to the White House for a second term.The S&P 500 has risen roughly 3 percent since the start of the year and has nudged up 1.2 percent since inauguration day, despite the volatility.Impending tariffs are adding to concern about an acceleration in inflation. On Monday, Mr. Trump announced tariffs on foreign steel and aluminum. He has already imposed a 10 percent tariff on Chinese goods, and broad 25 percent tariffs on Canada and Mexico are set to take effect in March, after being delayed for a month.“Rising prices already appear to be a headwind, and the prospect of new trade barriers have the potential to further fuel inflationary pressures by increasing costs for businesses and consumers,” said Jason Pride, chief of investment strategy and research at Glenmede, a wealth management firm. More

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    California’s FAIR Plan Gets $1 Billion Bailout After L.A. Fires

    The move will likely lead to higher costs for households across the state, and may push more insurers to leave, intensifying a home insurance crisis.California’s home insurance plan of last resort, designed for people who can’t get coverage on the private market, does not have enough money to pay claims from the Los Angeles wildfires and is getting an infusion of cash from regular insurers.State regulators said Tuesday that they will allow the program, known as the FAIR Plan, to collect $1 billion from private insurance companies doing business in California to pay its claims. That is likely to drive up insurance costs for homeowners across the state.The situation marks a perilous new stage for California’s home insurance market, which had already been reeling from wildfires made more frequent and intense by climate change. Facing growing losses, major insurers like State Farm were already pulling back from the state, making it harder for homeowners to find coverage.Now the pressure to leave will be even greater.The $1 billion assessment is the largest since the FAIR Plan was created in 1968, and the first time since the 1994 Northridge earthquake near Los Angeles that the FAIR Plan has faced claims it can’t pay on its own. The fee will be divided among insurers based on their market share, as required by state law.“The number one priority right now is that the FAIR Plan pay out its claims,” Ricardo Lara, California’s insurance commissioner, said in an interview. “The FAIR Plan, the way we’ve set it up, is doing what it’s supposed to.”As of 2023, the state’s largest insurers by market share were State Farm, Farmers Insurance Group and CSAA Insurance, according to data from AM Best, a company that rates the financial strength of insurers. Other major insurers in the top 10 included Liberty Mutual, Allstate and Travelers.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Enjoying the Pinnacle of Power, Musk Holds Court on Trump’s Stage

    The president let the spotlight in the Oval Office go to his billionaire friend/budget slasher, who cited blank checks and 150-year-old Social Security beneficiaries to justify purging the federal work force.Three weeks into this administration, hardly a day seems to go by that does not produce a norm-busting moment at the White House. But the scene that played out in the Oval Office on Tuesday afternoon was among the wildest yet.President Trump sat behind the Resolute Desk while Elon Musk stood at his side and attempted to explain, for the first time in public since Inauguration Day, what it is he came to Washington to do.For weeks, he and his Dorito-dusted minions have burrowed deep inside the federal government, tearing the thing apart from within by sending workers packing and shutting down programs and entire agencies, testing if not exceeding the bounds of the law and the Constitution in the process.So far, the only explanations to be had about what they are doing or where they are going next have come in the form of brief or sometimes trolling messages on the social media platform Mr. Musk owns or in opaque statements from administration officials.Dressed all in black, with a dark MAGA hat on his head and his young son fidgeting by his side or on his shoulders, Mr. Musk, seeming quite jolly about finding himself at the very pinnacle of power, sought on Tuesday to justify pushing tens of thousands of federal employees out the door by casting them as a collection of unelected and unaccountable managers of a wasteful and corrupt bureaucracy.Workers overseeing contracts were mysteriously getting rich, he asserted without any backing details or evidence. Social Security was paying benefits to 150-year-olds. Taxpayers were being gouged.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    As Trump Attacks D.E.I., Wall Street Worries

    Goldman Sachs will drop a demand that corporate boards of directors include women and members of minority groups as financial firms backpedal from D.E.I. promises.Wall Street has not typically been accused of doing too much for women and minority groups. The financial services industry, after all, is one in which more major banks are named after the Morgan family than led by a female chief executive.So it meant something over the past half-decade or so when the biggest names in finance said, over and over again, that they would pour dollars and effort into lending to, hiring, promoting and working with underserved communities.And it means something else now, as many of those much-promoted policies and practices are being scrubbed to be sure they don’t wind up in the cross hairs of the Trump administration’s campaign against diversity, equity and inclusion.The retreat includes white-collar investment banks, consultancies, mutual funds and stock exchanges. The latest was Goldman Sachs, which said on Tuesday that it would drop a quota that forced corporate boards of directors to include women and members of minority groups. Others on Wall Street are curtailing efforts to recruit Black and Latino employees.One international bank, BNP Paribas, even hit the brakes on programming new events for next month’s International Women’s Day.This pullback has thus far been less overt than, say, in the technology industry, whose executives have made public displays of their support for President Trump’s anti-diversity initiatives. And some financial firms had started to make changes long before the election — opening programs aimed at minority candidates to all, for example.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Vance, in First Foreign Speech, Tells Europe That U.S. Will Dominate A.I.

    Speaking in Paris at an artificial intelligence summit, the vice president gave an America First vision of the technology — with the U.S. dominating the chips, the software and the rules.Vice President JD Vance told European and Asian leaders in Paris on Tuesday that the Trump Administration was adopting an aggressive, America First approach to the race to dominate all the building blocks of artificial intelligence, and warned Europeans to dismantle regulations and get aboard with Washington.On his first foreign trip since taking office, Mr. Vance used his opening address at an A.I. summit meeting hosted by France and India to describe his vision of a coming era of American technological domination. Europe, he said, would be forced to chose between using American-designed and manufactured technology or siding with authoritarian competitors — a not-very-veiled reference to China — who would exploit the technology to their detriment.“The Trump administration will ensure that the most powerful A.I. systems are built in the U.S. with American design and manufactured chips,” he said, quickly adding that “just because we are the leader doesn’t mean we want to or need to go it alone.”But he said that for Europe to become what he clearly envisions as a junior partner, it must eliminate much of its digital regulatory structure — and much of its policing of the internet for what its governments define as disinformation.For Mr. Vance, who is on a weeklong tour that will take him next to the Munich Security Conference, Europe’s premier meeting of leaders, foreign and defense ministers and others, the speech was clearly intended as a warning shot. It largely silenced the hall in a wing of the Grand Palais in the center of Paris. Leaders accustomed to talking about “guardrails” for emerging artificial intelligence applications and “equity” to assure the technology is available and comfortable for underserved populations heard none of those phrases from Mr. Vance.He spoke only hours after President Trump put new 25 percent tariffs on foreign steel, essentially negating trade agreements with Europe and other regions. Mr. Vance’s speech, precisely composed and delivered with emphasis, seemed an indicator of the tone Mr. Trump’s national security leaders plan to take to Europe this week.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    36 Hours After Russell Vought Took Over Consumer Bureau, He Shut Its Operations

    The agency had been one of Wall Street’s most feared regulators, with the power to issue rules on mortgages, credit cards, student loans and other areas affecting Americans’ financial lives.The day before Linda Wetzel closed on her retirement home in Southport, N.C., in 2012 — a cozy place where she could open the windows at night and catch an ocean breeze — the bank making the loan surprised her with a fee she hadn’t expected. Ms. Wetzel scoured her mortgage paperwork and couldn’t find the charge disclosed anywhere.Ms. Wetzel made the payment and then filed an online complaint with the Consumer Financial Protection Bureau. The bank quickly opened an investigation, and a month later, it sent her a $5,600 check.“My first thought was ‘thank you.’ I was in tears,” she recalled. “That money was a year or two of savings on my mortgage. It was my little nest egg.”Ms. Wetzel’s refund is a tiny piece of the work the bureau has done since it was created in 2011. It has clawed back $21 billion for consumers. It slashed overdraft fees, reformed the student loan servicing market, transformed mortgage lending rules and forced banks and money transmitters to compensate fraud victims.It may no longer be able to carry out that work.President Trump on Friday appointed Russell Vought, who was confirmed a day earlier to lead the Office of Management and Budget, as the agency’s acting director. Mr. Vought was an author of Project 2025, a conservative blueprint for upending the federal government that called for significant changes, including abolishing the consumer bureau.In less than 36 hours, Mr. Vought threw the agency into chaos. On Saturday, he ordered the bureau’s 1,700 employees to stop nearly all their work and announced plans to cut off the agency’s funding. Then on Sunday, he closed the bureau’s headquarters for the coming week. Workers who tried to retrieve their laptops from the office were turned away, employees said.The bureau “has been a woke & weaponized agency against disfavored industries and individuals for a long time,” Mr. Vought wrote Sunday on X. “This must end.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Now Is Not the Time to Tune Out

    Don’t get distracted. Don’t get overwhelmed. Don’t get paralyzed and pulled into the chaos that President Trump and his allies are purposely creating with the volume and speed of executive orders; the effort to dismantle the federal government; the performative attacks on immigrants, transgender people and the very concept of diversity itself; the demands that other countries accept Americans as their new overlords; and the dizzying sense that the White House could do or say anything at any moment. All of this is intended to keep the country on its back heel so President Trump can blaze ahead in his drive for maximum executive power, so no one can stop the audacious, ill-conceived and frequently illegal agenda being advanced by his administration. For goodness sake, don’t tune out.The actions of this presidency need to be tracked, and when they cross moral or legal lines, they need to be challenged, boldly and thoughtfully, with the confidence that the nation’s system of checks and balances will prove up to the task. There are reasons for concern on that front, of course. The Republican-led Congress has so far abdicated its role as a coequal branch of government, from allowing its laws and spending directives to be systematically cast aside to fearfully assenting to the president stocking his cabinet with erratic, unqualified loyalists. Much of civil society — from the business community, to higher education, to parts of the corporate media — has been disturbingly quiet, even acquiescent.But there are encouraging signs as well. The courts, the most important check on a president who aims to expand his legally authorized powers and remove any guardrails, so far have held, blocking a number of Mr. Trump’s initiatives. States have also taken action, with several Democratic attorneys general suing over Mr. Trump’s attempts to freeze federal grant funding and end birthright citizenship and vowing to fight Elon Musk’s team’s access to federal payment systems containing personal information. State or local officials are also defending their laws in the face of federal immigration raids and fighting Mr. Trump’s executive order barring gender-affirming medical care for transgender children. And independent-minded journalism organizations have continued excellent reporting on the fire hose of excesses of these early days, bringing essential information to the public.None of this is to say that Mr. Trump shouldn’t have the opportunity to govern. Seventy-seven million Americans cast ballots to put Mr. Trump back in the White House, and the Republican Party, now fully remade in service of the MAGA movement, holds majorities in both houses of Congress. Elections, it is often noted, have consequences. But is this unconstitutional overhaul of the American government — far more sweeping, haphazard and cruel than anything he campaigned on — really what those voters signed up for? To put America’s system of checks and balances, its alliances and its national security at risk? Because, beyond the bluster, that is what Mr. Trump, Mr. Musk and their supporters are doing.Three weeks into the second Trump term, here are a handful of the places where Americans can’t afford to turn away:Elon Musk’s Executive Takeover. The problem is not that Mr. Musk is unelected, it’s that he is breaking the law. Not even a full-time government employee, he is trying to unilaterally shut down or dismantle entire federal agencies and departments, ignoring congressional mandates — this is prohibited by the Constitution. He and his team are behind the announced buyout offers to millions of civil servants — including the entire C.I.A. work force — and have effectively forced out top officials whom he has no power to fire. He is on a mission to rampage through the government’s confidential payment systems with an anarchist’s glee, deciding on his own which aspects of federal spending are legitimate, and substituting his instinctual embrace of conspiracy theories for any effort to understand the government functions he’s undermining.Both the president and Mr. Musk seem to relish that most of their actions are plainly illegal, daring the courts to step in and stop them, on the theory that these laws are flawed to begin with. At the same time, you have the richest man in the world leading this effort, still holding interests in his private companies, which do billions of dollars in business with and are regulated by the federal government. It’s a level of conflict of interest unlike anything we’ve seen in the modern era.The Administration vs. Public Officials (a.k.a. Trump’s Enemies). Along with terminating more than a dozen members of the U.S. Attorneys Office in Washington who’d worked on cases involving the Jan. 6, 2021, riot, the Trump administration began collecting the names of thousands of F.B.I. personnel who helped to investigate crimes associated with the attack on the Capitol. Several top-ranking officials at the agency have already been fired. The move offered an early glimpse at how Mr. Trump and his nominee to run the F.B.I., Kash Patel — who published a literal enemies list of “Executive Branch Deep State” members — might use federal law enforcement against the president’s political opponents. In perhaps the most disturbing warning to those who might think to question or defy him, Mr. Trump stripped several of his former advisers of security protection that was deemed necessary given credible threats by the Iranian government to assassinate them for actions they took under his direct order.The President’s Imperial Bluster and Attacks on Allies. Mr. Trump has spent weeks coyly suggesting the United States is on the verge of illegally seizing territory on three continents, leaving all levels of consternation in his wake. Then there are his long-planned, seemingly legal — even if extremely ill advised — tariffs. All the threats and insults have gained Mr. Trump some short-term concessions, but none are likely to make America’s economy stronger or make America safer in the world. Running roughshod over centuries-old alliances will hurt the targeted countries, but it also could compromise national security, raise the price of goods, disrupt global commerce, benefit adversaries like China and Russia that are eager to fill the void of an increasingly distrusted America.Public Health Imperiled. Robert F. Kennedy Jr., a vocal vaccine skeptic, has not been confirmed as Mr. Trump’s health and human services secretary yet. But the administration is already taking steps to weaken and wreck public and global health protections. On Thursday, The Times reported that the administration plans to reduce the staff of more than 10,000 Americans at the U.S. Agency for International Development to only about 300 people, and cancel nearly 800 awards and contracts the agency administered. The president — much less Mr. Musk — cannot shut down a federal agency without a vote by Congress. To do so is also illegal under the Constitution. More than half of U.S.A.I.D.’s spending in 2023 went to health programs intended to stop the spread of diseases, such as polio, Ebola, tuberculosis, H.I.V./AIDS and malaria or to humanitarian assistance to respond to emergencies and help stabilize war-torn regions. If you care about preventing the next pandemic or the pressures of global migration, U.S.A.I.D. is an investment you should want the United States to make.The President’s Anti-Civil Rights Blitz. Mr. Trump has issued a flurry of executive orders and pronouncements that set back decades of progress on civil rights and often openly defy the Constitution. He has especially targeted transgender Americans and has threatened federal funding for public schools that do not adhere to right-wing ideology about how history and race should be discussed. He has also found nearly daily excuses to rail against diversity, equity and inclusion policies, even blaming D.E.I. for the Jan. 29 air crash in Washington and strongly implying that any air traffic controller who is a woman or not white is inferior and has been given a job for the wrong reasons. And the new attorney general, Pam Bondi, announced on Wednesday that private companies that choose to maintain their own diversity and inclusion policies could be targeted for “criminal investigations.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Sports Betting Reveals the Addiction in All of Us

    When we think about any addiction, we tend to focus on people who are utterly consumed by it — those whose lives are visibly falling apart. Yet gambling challenges our usual assumptions about addiction and risk, as its harms extend far beyond the most severe cases.Consider a young man from my therapy practice, a former college athlete, who isn’t bankrupt or in crisis but feels stuck in a cycle of unhealthy online sports betting. He repeatedly deletes the betting app from his phone, only to reinstall it days later at the prompting of a well-timed email, a group bet with friends or simply the ads plastered across every sports arena. He does fine at work and mostly keeps to the dollar limits he sets, but his internal preoccupation, restlessness and chasing of losses just feel bad. He wouldn’t call himself addicted, but he doesn’t feel healthy, either. At the very least, he has the creeping sense that he’d feel better if he put his attention and energy toward something more meaningful.Serious gambling addiction is devastating. Beyond financial ruin, it increases the risk of physical health problems, domestic violence and family rupture. Every year, 2.5 million American adults suffer from severe gambling problems. Many suffer invisibly, silently wagering away their lives on cellphones, perhaps in the very same room as their family and friends.These severe cases demand attention, but focusing only on them obscures something important. As a physician and someone in recovery from alcohol and stimulant addiction myself, I’m concerned by how we have been conditioned to see addiction in all-or-nothing terms. Beyond the millions of Americans who meet the criteria for gambling disorder, five million to eight million more have a mild to moderate gambling problem that still affects their lives — like my patient. Since the federal ban on sports betting was struck down in 2018, sports gambling in the United States has exploded, with annual wagers now approaching $150 billion.Today’s surge of sports betting — supercharged by technology and unfettered industry practices — shows how everyone can struggle with self-control to varying degrees. No longer a simple matter of putting money down on which competitor will win, modern technology has transformed sports betting into a high-speed, continuous stream of wagers throughout the game. For Sunday’s Super Bowl, people can place bets on things from the result of the coin toss to the yardage of the next drive, from Kendrick Lamar’s halftime guests to how many times Taylor Swift is mentioned.Online gambling companies collect troves of personalized data to guide betting variables and marketing to match each user’s patterns and preferences. (The Athletic, which is owned by The New York Times, has a partnership with BetMGM, online sports betting and gaming company.) Subscription plans and automated deposits further erode the friction between impulse and action.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More