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      Oil Companies Wanted Trump to Lower Costs. Tariffs Are Raising Them.

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      President Trump’s promise during last year’s election to make it far easier to drill for oil and gas thrilled energy executives who believed his policies would lower their costs and help them make a lot more money.Those hopes are now fading. Thanks to Mr. Trump’s tariffs, the oil and gas industry is contending with rising prices for essential materials like steel pipes used to line new wells.That has not yet translated into a meaningful change in U.S. drilling activity or production expectations, but companies have begun revising budgets to reflect higher materials costs. Decisions made today about which wells to drill will affect production many months from now.Oil refineries are separately bracing for a tariff on Canadian oil, which some of them need to produce gasoline, diesel and other fuels.At the same time, consumers have grown jittery about the economy and the price of oil has fallen about 10 percent since just before Mr. Trump took office, to around $70 a barrel. Oil companies tend to drill less when prices fall.The combination could complicate Mr. Trump’s stated desire to juice U.S. oil and natural gas production, which are already at or near record highs.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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      PCE Report Showed Inflation Eased Slightly in January

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      But consumer spending unexpectedly slowed, complicating the central bank’s plans for interest rates.Getting inflation under control since the worst surge in decades has been a bumpy process in recent months. New data on Friday showed a little progress, but also an unexpected pullback in consumer spending, complicating the path forward for the Federal Reserve as it debates when to restart interest rate cuts.The central bank’s preferred inflation measure, released on Friday, climbed 2.5 percent in January from a year earlier, slightly lower than the previous reading of 2.6 percent but still well above the central bank’s 2 percent target. On a monthly basis, prices increased 0.3 percent, in line with December’s pace.The “core” personal consumption expenditures price index, which strips out volatile food and energy costs and is closely watched as a gauge for underlying inflation, rose another 0.3 percent in January. Compared to the same time last year, it is up 2.6 percent, data from the Commerce Department showed. In December, it rose at an annual pace of 2.8 percent.The inflation figures were in line with what economists had expected and underscored the Fed’s decision to proceed cautiously with interest rate cuts after making adjustments in the second half of last year. The interest rate set by the Fed stands at 4.25 percent to 4.5 percent.Spending fell 0.2 percent in January, led by a drop in spending on cars and other goods. Economists had expected a 0.2 percent increase overall, following a 0.8 percent increase in December. Once adjusted for inflation, spending dropped by 0.5 percentage points, which is the sharpest monthly drop in almost four years.Thomas Ryan, an economist at Capital Economics, attributed the decline in part to “unseasonably severe winter weather,” but warned that the Fed’s job will become “trickier if January’s sharp decline in consumption was a sign of consumer strength buckling.”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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      Can the Federal Reserve Look Past Trump’s Tariffs?

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      Top officials are grappling with how to handle potential price increases caused by the administration’s policies.As President Trump’s efforts to restructure the global trade system with expansive tariffs begin to take shape, one question continues to dog officials at the Federal Reserve: How will these policies impact the central bank’s plans to lower interest rates?One influential Fed governor made clear on Monday that he did not expect Mr. Trump’s policies to derail the Fed’s efforts to get inflation under control, suggesting instead that fresh interest rate cuts are still in play this year.“My baseline view is that any imposition of tariffs will only modestly increase prices and in a nonpersistent manner,” Christopher J. Waller, the official, said in remarks at an event in Australia Monday evening. “So I favor looking through these effects when setting monetary policy to the best of our ability.”Economists are concerned that tariffs, which are essentially taxes on American consumers, will increase prices in the United States, at least temporarily, and over time slow economic growth.Mr. Waller acknowledged that the economic impact of the tariffs could be larger than anticipated depending on how they are structured and later put in place. But he suggested that any uptick in prices from tariffs could be blunted by other policies, which could have “positive supply effects and put downward pressure on inflation.”Mr. Waller’s views matter given that he is one of the seven officials who make up the Board of Governors and votes at every policy meeting.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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      Donald Trump’s Chicken-and-Egg Inflation Problem

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      A surge in egg prices underscores how persistent inflation is spooking the markets and could check the president’s boldest economic policies.Egg prices are on an epic run, part of an inflation surge that could but the brakes on President Trump’s economic plans.Frederic J. Brown/Agence France-Presse — Getty ImagesJust in: Lawyers for Elon Musk said he’d withdraw his $97.4 billion bid for control of OpenAI if the company halted its efforts to become a for-profit enterprise. More below.Separately: You might recall that several years ago I wrote a series of columns, following a raft of mass shootings, that inspired the creation of a “merchant category code” for gun retailers so credit card companies could better identify suspicious activity the way they already did to help prevent money laundering and sex trafficking.Well, this week Representative Riley Moore, Republican of West Virginia, introduced a bill to make it illegal for credit card companies to require “merchant category codes that distinguish a firearms retailer from general-merchandise retailer.” That means gun retailers would be able to mask what they sell. What do you think of what’s happening?Scrambling Trump’s economic plans President Trump inherited a strong economy with booming labor and stock markets. But one economic holdover could tie his hands: stubbornly strong inflation.Investors are already getting antsy, with stock markets briefly plunging and the bond market suffering its worst day of the year so far after unexpectedly worrying revelations in the latest Consumer Price Index report. It raises questions about what options the White House and Fed would have to maneuver if prices continued to rise.The latest: The C.P.I. data showed headline prices over the past three months running at an annualized pace of 4.5 percent — well above the central bank’s 2 percent target.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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      Stocks Drop After Hotter Than Expected Inflation Reading

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      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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      The Fed Is Stuck Fighting the Last War

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      Mired in a battle to contain surging prices, the central bank also needs to be nimble enough for the economic downturns to come, our columnist says.The battle against inflation during the Biden years is almost behind us. But we’re in danger of learning the wrong lessons from it.The Federal Reserve, holding its last meeting of the year this coming week, has been fighting runaway consumer prices for nearly three years. So far, at least, it has managed an unusual feat: The rate of inflation has dropped sharply from its peak and there has been no recession.Yet the Fed is stuck in a difficult place. With prices still rising faster than the central bank’s 2 percent target, the incoming Trump administration will be hypersensitive about inflation, which was a decisive factor in the November elections. At the same time, the new administration’s policies on tariffs and immigration could set off another inflation surge. So the Fed must remain acutely vigilant on the inflation front.But it will have to keep experimenting, to be ready for the curve balls coming from future recessions. Some economists believe the Fed would gain flexibility if it reconsidered its 2 percent inflation target, though they say the central bank can’t take that step now because it is under too much pressure to preserve its own institutional independence.Still, a single-minded focus on inflation could leave the Fed without the right tools for coping with economic downturns ahead.The Fed’s predicament reminds me of a general who is endlessly fighting the last war — conscientiously dissecting the tactics of recent battles and failing to prepare properly for the next ones.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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      Men in Caring Jobs Will Make Society More Equal

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      In her prescient 2012 book, “The End of Men,” my friend Hanna Rosin described a modern American dynamic between archetypes that she called “Plastic Woman” and “Cardboard Man.” These comic book characters represented American women who made miraculous social progress in the 20th century and American men who stalled out. That’s because women in the past 60 years or so have been able to be infinitely flexible and responsive to structural economic changes and men remained rigid planks. This hasn’t just caused a shift in the job market, it’s caused a shift in the marriage market, too. If men aren’t breadwinners, and they’re not caregivers, either — what are they for?Rosin explains that Plastic Woman went “from barely working at all to working only until she got married to working while married and then working with children, even babies. If a space opens up for her to make more money than her husband, she grabs it.” By contrast, Cardboard Man “hardly changes at all. A century can go by and his lifestyle and ambitions remain largely the same. There are many professions that have gone from all-male to female, and almost none that have gone the other way.”She added that a man’s sense of himself is often tied to having a traditionally masculine, physical job in construction, utility work or some kind of manufacturing. “They could move more quickly into new roles now open to them — college graduate, nurse, teacher, full-time father — but for some reason, they hesitate.”A lot of Rosin’s book still rings true 12 years later. Though on the campaign trail both Donald Trump and Kamala Harris promised to bring back those old-school, manly jobs, as Rebecca Patterson pointed out in an Opinion guest essay in October, manufacturing jobs are long gone and they’re not returning. “Even if every estimated open role is filled, the total employed in manufacturing would still be about three million short of its 1979 peak, according to Federal Reserve Bank of St. Louis data,” Patterson noted.Which is why I was so pleased to see that Cardboard Man may be softening up, even as the political posturing around him may not have shifted. According to Harriet Torry in The Wall Street Journal, “The number of male registered nurses in the U.S. has nearly tripled since the early 2000s,” going “from about 140,000 in 2000 to about 400,000 in 2023.” In health care, wage and market growth exceed the national average, and people still need emergency surgeries even in recessions, CNN’s Bryan Mena notes. Health care jobs are particularly vital in rural parts of the country, where hospitals may be among the largest employers in the area.Torry describes men who are moving into traditionally female jobs (or the “pink collar” sector) as rational economic actors who are dealing with the job market as it is, rather than as they wish it might be. “Many of the manufacturing jobs that are being moved overseas, replaced by automation or phased out of the American economy were mostly filled by men. As a result, other occupations traditionally dominated by women are now gaining a larger share of men, including elementary and middle schoolteachers and customer service representatives,” Torry writes.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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      JD Vance, Elon Musk and the Future of America

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      Beneath all the furor around Donald Trump’s appointments — Matt Gaetz down and out, Pete Hegseth down but maybe coming back, the Kash Patel drama waiting the wings — the most important figures in this administration’s orbit have not changed since Election Day: Besides the president himself, the future of Trumpism is still most likely to be shaped and stamped by two men, JD Vance and Elon Musk.Not just because of their talent and achievements, and not just because Vance is the political heir apparent and Musk would be one of the world’s most influential men even if he didn’t have the ear of the president-elect. It’s also because they represent, more clearly than any other appointee, two potent visions for a 21st century right, and their interaction is likely to shape conservatism for the next four years and beyond.Musk is the dynamist, the believer in growth and innovation and exploration as the lodestars of American civilization. His dynamism was not always especially ideological: The Tesla and SpaceX mogul was once a Barack Obama Democrat, happy to support an active and sometimes spendthrift government so long as it spent freely on his projects. But as Musk has moved right, he has adopted a more libertarian pose, insisting on the profound wastefulness of government spending and the tyranny of the administrative state.Vance meanwhile is the populist, committed to protect and uplift those parts of America neglected or left behind in an age of globalization. Along with his support for the Trumpian causes of tariffs and immigration restriction, this worldview has made him more sympathetic than the average Republican senator to certain forms of government investment — from longstanding programs like Social Security to new ideas about industrial policy and family policy.Despite this contrast, the Musk and Vance worldviews overlap in important ways. Musk has moved in a populist direction on immigration, while Vance has been a venture capitalist and clearly has a strong sympathy for parts of the dynamist worldview, especially its critique of the regulatory state. Both men share a farsighted interest in the collapsing birthrate, a heretofore-fringe issue that’s likely to dominate the later parts of the 21st century. And there is modest-but-real convergence between the Muskian “tech” worldview and Vance’s more “neo-trad” style of religious conservatism, based on not just a shared antipathy toward wokeness but also similar views about the intelligibility of the cosmos and the providential place of humankind in history.So you can imagine a scenario, in Trump’s second term and beyond, where these convergences yield a dynamist-populist fusionism — a conservatism that manages to simultaneously aim for the stars and uplift and protect the working class, in which economic growth and technological progress help renew the heartland (as Musk’s own companies have brought jobs and optimism to South Texas) while also preserving our creaking social compact.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