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    Federal Reserve issues rare statement asserting independence amid Trump pressure

    The Federal Reserve issued a rare, strongly worded statement on Thursday after chair Jerome Powell spoke with Donald Trump at the White House on Thursday morning, holding firm on the central bank’s independence amid pressure from Trump to lower interest rates.The three-paragraph statement emphasized the Fed’s independent, non-partisan role in setting monetary policy based on economic data.“Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,” the statement read.Powell told Trump that he and other Fed officials “will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis”, according to the statement.That the Fed, which tends to be extremely reserved with public statements, issued the brief memo shows that officials are aware of Trump’s pressure campaign and are standing firm on the Fed’s independence.At Thursday’s White House press briefing, press secretary Karoline Leavitt said that the Fed’s statement is “correct” but that Trump “did say that the Fed chair is making a mistake by not lowering rates”.Historically, presidents show deference to the Fed, respecting the central bank’s independence. But over the last few months, Trump has tried to publicly pressure Powell to lower interest rates, as the Fed did last year, though officials say that the economy – thrown into a tailspin from Trump’s trade war – has become too unstable to continue lowering rates.After Trump’s “liberation day” in early April, when he announced a slate of tariffs that ended up crashing US stock markets, Trump wrote on social media: “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly.”Powell, who was appointed during Trump’s first term in 2018, has resisted the pressure from Trump and has warned that high tariffs could lead to inflation and, earlier in May, said that officials are “in no hurry” to cut interest rates – all statements that seem to have put Trump on edge.“‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue,” Trump wrote after the Fed’s meeting.Trump had previously threatened to fire Powell, though it’s unclear whether the president has the power to do so. Last week, the supreme court allowed Trump to follow through on his dismissal of officials on the National Labor Relations Board, the panel that oversees labor disputes, but judges noted that the Federal Reserve is a “uniquely structured, quasi-private entity” – implying that it likely won’t be so easy for Trump to get rid of Powell. More

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    Trump confirms he’ll be negotiating his signature tax bill after Musk criticism

    Donald Trump said he will be negotiating his signature tax bill after Elon Musk publicly criticised the president’s spending plan, saying it “undermines” cost-cutting efforts that the world’s richest man once spearheaded.Speaking to reporters on Wednesday, Trump acknowledged the bill “needs to get a lot of support” in Congress, adding “we have to get a lot of votes”. The president also said he was “not happy about certain aspects of it, but I’m thrilled by other aspects of it” and confirmed he would be negotiating the legislation.The remarks come after Musk said he was “disappointed to see the massive spending bill, which increases the budget deficit … and undermines the work that the Doge team is doing” in comments made to CBS as part of a longer interview due to run on its Sunday morning programme this weekend.Musk had been leading the “department of government efficiency” (Doge) since January, which was given the task of cutting state spending. He later announced in April he would be stepping back from the Trump administration after Tesla’s earnings plunged, and spending millions of dollars in a supreme court race that his Republican candidate ultimately lost.Musk now appears to be hitting out at Trump’s One Big Beautiful Bill Act, which was narrowly approved last week by the House of Representatives.The bill pushes ahead with a number of Trump’s campaign promises, including extending tax cuts for individuals and corporations and ending clean energy incentives enacted under Joe Biden.It also involves about $1tn (£741bn) in cuts to benefits aimed at supporting struggling households, including a health insurance scheme for low-income families, Medicaid, and Supplemental Nutrition Assistance Program (Snap) food stamps.However, the bill also funds the construction of a wall along the border with Mexico, as well as staff and facilities for mass deportations of undocumented immigrants. Even when taking cuts into account, the bill is expected to add about $2.3tn to the deficit, according to the non-partisan Congressional Budget Office.Musk told CBS: “I think a bill can be big, or it can be beautiful. But I don’t know if it can be both. My personal opinion.”The comments will fuel rumours of a growing rift between the billionaire and the US president, whom Musk helped bankroll last year. In total, Musk’s super political action committee donated $200m to Trump’s presidential campaign before the November election, which many credit with helping to return Trump to the White House.Musk also has business interests at stake, with Trump’s bill due to end a $7,500 tax credit for electric vehicles and to impose a $250 annual registration fee for owners. The Tesla boss has previously called for an end to those incentives, although that was months before the EV maker’s earnings started to wobble.skip past newsletter promotionafter newsletter promotionLast month, Tesla reported a 71% drop in first-quarter profits to $409m, compared with $1.39bn in the same period in 2024. Tesla’s stock has also suffered, with the company losing about a quarter of its market value since Musk took a top spot in Trump’s administration at the start of the year.Musk’s criticism is likely to fuel opposition by hardline Republicans, who threatened to block Trump’s legislation as it passes through the US senate unless the president rolls out deeper cuts that would reduce the national debt. One key senator, Rand Paul from Kentucky, told Fox News Sunday that the bill’s cuts were “wimpy and anaemic” and would “explode the debt”.However, Trump has already been treading on politically sensitive territory by supporting a bill that makes big cuts to programmes he promised to protect. He pledged multiple times on the campaign trail last year that he would not touch basic safety nets, including Medicaid.Some of the president’s “make America great again” supporters, including the former White House strategist Steve Bannon, have also warned against such a move, with one Missouri senator, Josh Hawley, saying that cutting health insurance for the working poor would be “politically suicidal”. More

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    Trump says he’s ‘seriously considering’ taking Fannie Mae and Freddie Mac public

    Donald Trump said he will make a decision in the near future about taking Fannie Mae and Freddie Mac public, a move which he said he is giving “very serious consideration”.In a post on Truth Social, the US president said he will speak with treasury secretary, Scott Bessent; commerce secretary, Howard Lutnick; and federal housing finance director, William Pulte, about doing so.He added: “Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned!”These two companies are the backbone of the US housing market. Together they support about 70% of US mortgages.Fannie and Freddie, which operate as for-profit corporations with private shareholders, were created by the US Congress to expand the national home lending market by buying home loans from private lenders and repackaging them as mortgage-backed securities.When the housing market collapsed in 2008, Fannie Mae and Freddie Mac suffered overwhelming losses. To avoid catastrophic effects for the US economy, they were placed in conservatorship under the newly created Federal Housing Finance Agency.Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York and member of the Housing for US coalition, on Wednesday called on Trump to invest the expected $250bn in proceeds from the sale of Fannie Mae and Freddie Mac into middle-income housing, after the commander-in-chief announced he’s moving forward to release the government-sponsored enterprises from conservatorship.“President Trump is right to free Fannie and Freddie. But even better, let’s use the proceeds – some $250bn – to build middle-class housing for American workers by American workers. Housing for US stands ready to work with President Trump to make it happen.”Previous attempts to rid government control of the organizations, including under Trump’s first term in office, have been unsuccessful.In February, Bessent said the release of Fannie and Freddie from their conservatorship would depend on mortgage rate implications.“The priority for a Fannie and Freddie release, the most important metric that I’m looking at, is any study or hint that mortgage rates would go up,” Bessent said in an interview with Bloomberg.Reuters contributed to this report More

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    Cooking the books? Fears Trump could target statisticians if data disappoints

    Summarizing his befuddlement with numbers, Mark Twain observed that there were “lies, damned lies and statistics”.The acerbic phrase later become so deeply embedded in popular consciousness that it once formed the title to an episode of The West Wing, NBC’s portrayal of a fictitious US president played by Martin Sheen.Now professional economists and number-crunchers fear the aphorism could become a White House theme in real life. Buffeted by global markets and public opinion – both of which show a wary skepticism of Donald Trump’s affinity for trade wars – the president may be about to turn his renowned hostility to truths at odds with what he believes towards public servants charged with producing accurate information.A proposed rule change making it easier to fire civil servants deemed to be “intentionally subverting presidential directives” could pave the way for the White House to fire statisticians employed to produce objective data on the economy but whose figures prove politically inconvenient, experts warn.Statistics released by agencies such as the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA) are used by the Federal Reserve Bank to set inflation policy and interest rates. They also form the basis on which businesses and investors take decisions.The US’s global reputation as a stable economic power and a reliable partner goes hand-in-hand with its long history of producing accurate data, dating back to the establishment of the BLS in 1884. Interfere with the latter and you risk sacrificing the former, experts warn.But with Trump under pressure to explain shrinking gross domestic product (GDP) figures amid economists’ warnings that tariffs could trigger a recession, the administration could use new employment rules to pressure workers into “cooking the books”.“There are a number of changes to the civil service that make it much easier for the administration to try to interfere with the activities of the statistical agencies and that worries me,” said Erica Groshen, a specialist in government statistics at Cornell University.While acknowledging that there is as yet “no evidence” the Trump administration has done so, Groshen, a former commissioner at the Bureau of Labor Statistics (BLS), fears a new rule proposed last month by the White House’s office of personnel management threatens the future integrity of federal agencies’ figures.The change, based on an executive order signed by Trump on 20 January immediately after his inauguration, would reclassify about 50,000 as-yet-unspecified permanent civil servant positions to “policy/career” category, thus enabling their removal for “poor performance or misconduct”.The precise roles to be so redefined have yet to be revealed but Groshen fears statistic specialists will be in the administration’s crosshairs.“Bureau of Labor Statistics’ leaders could be fired for releasing or planning to release jobs or inflation statistics unfavorable to the president’s policy agenda,” she wrote in a briefing paper that urges organizations dependent on BLS figures to submit comments criticizing the proposal.“By making it easier to remove employees if a president determines that they are interfering with his or her policies, it increases the potential for passivity or political loyalty to be prioritized over expertise and experience.”Trump regularly cast doubt on the accuracy of economic data when in opposition – calling positive BLS jobs figures during the Obama and Biden administrations “fake” but hailing them as accurate when they painted a rosy picture of the economy during his first presidency.Last month, when GDP figures showed an economic contraction during the first 100 days – partly fueled by tariffs – Trump put the blame on Biden.“We had numbers that, despite what we were handed, we turned them around and we were getting them really turned around,” he told reporters.The commerce secretary, Howard Lutnick – who has direct responsibility over many of the statistical agencies – has suggested changing the way GDP is calculated in a way that might provide more upbeat figures but which would mark a departure from established practice and international standards.Diluting data agencies’ impartiality risks adding the US to the category of countries which have had the veracity of their economic statistics openly doubted, critics say. Groshen cited Argentina, whose official inflation figures were rejected as false by the International Monetary Fund (IMF), and Greece, where government statisticians were said to have miraculously made inflation and disqualifyingly high budget deficits “disappear” to enable it to join the European Union’s single currency, the euro, in the late 1990s.The sleight of hand had dire consequences. The 2008 global financial crash propelled the country’s economy into a tail-spin, forcing it to seek huge loans from the IMF and the EU, which were only given on condition of harsh austerity measures and cuts to public services.Popular anger over the conditions in Greece destabilised establishment political parties and led to a rise in support for radical and populist alternatives, including the leftwing Syriza, which won power in 2015. Frequent elections and changes of government since have raised concerns about the health of the country’s democracy.The IMF also censured Argentina and threatened it with expulsion in 2013 after officials were found to have been grossly understating the inflation rate for the previous six years.Argentina – historically one of the IMF’s biggest borrowers – did not receive another loan from the organisation until 2018. That loan, followed by another in 2022, failed to stabilise the country’s economy and in 2023, Javier Milei, a far-right candidate and professed admirer of Trump, was elected president pledging drastic spending cuts to address its chronic economic problems.Last month saw the fund agree to another $20bn bailout for Milei’s government.Despite these baleful precedents, the Trump administration’s sensitivity to economic figures indicating a tariff-driven slowdown creates a potential spur to follow a similar path, argued Erasmus Kersting, an economics professor at Villanova University.“I would say that there’s definitely an incentive to cook the books, but I don’t think that it is going to be very easy or feasible to do,” he said, citing the US’s long tradition of producing accurate economic figures.“The Bureau of Economic Analysis would essentially need to be silenced or defunded and replaced with some other statistical agency, which would then result in different figures. The same would be true of the Bureau of Labor statistics.”Accurate and unbiased figures are crucial in helping the Federal Reserve form sound policy, Kersting said. In their absence, Trump might have more scope to attack the Fed’s chair, Jerome Powell, who he has already accused of “playing politics” by not bowing to his demand to cut interest rates.Kitty Richards, a former treasury and White House official under the Biden and Obama administrations, said data collection had been impaired by Elon Musk’s attacks on federal agencies under the auspices of the unofficial “department of government efficiency,” or Doge.“We should view attacks on government data collection as hand in glove with attacks on journalism,” said Richards, now a senior fellow at Groundwork Collaborative, a thinktank. “Undermining data collection and casting doubt on data that is released is part of a program of undermining the public’s ability to learn the truth.”Even a temporary interruption of the US’s established data-collecting capacity would be a “real tragedy” and lead to a permanent loss of knowledge, she said. “You can’t go back and fix it. If you have a data series stretching back 50 years, then it gets cut for two or three years, you no longer have that 50-year data series. You’ve lost knowledge forever.”Greshen, who is calling on users of government statistics to object to the proposed civil service changes before a 30-day window expires on 23 May, said the fate of US democracy could hinge on the continued production of accurate figures.“In a democracy, you want to be feeding people the right information so they will make the right choices. But if the goal is to destroy democracy, you’d want to control the statistics to fit your story … you want to be promoting your own version of reality.” More

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    ‘So many are devastated’: Trump’s federal firings and their ripple effect

    Naomi Anderson was on leave looking after her young baby when she was told her US Department of Agriculture job helping farmers in developing countries was being cut. A former volunteer with the Peace Corps, which sends young Americans overseas to projects in emerging economies, Anderson had expected to spend her whole career in international development.“I had taken this job two years ago expecting to stay here for at least 10 years, and you know, we had started to make a community and build up our life here. In January, we had started looking at buying a home,” she says.Now Anderson is having to consider giving up the apartment in the Washington DC commuter town of Reston, Virginia, that she shares with her husband and their four-month-old baby and almost two-year-old toddler.“Financially, it’s a little bit precarious, and honestly we’re not sure what we’re going to do,” says Anderson, who is also an activist with the local branch of the AFSCME union and dabbles in selling political merchandise. “We’re thinking about moving back to Ohio, where I’m from, where my family is. You know, it’s a lot cheaper there.”Anderson is far from alone. “In our apartment complex, there’s been lots of yard sales, people selling things and moving away. It really does seem like people are just picking up and leaving, because it’s too expensive to live here without a job,” she says.Tough life-decisions like these have been forced on hundreds of thousands of former federal employees in the past couple of months, as the so-called department of government efficiency (Doge), which is headed up by Donald Trump’s favourite tech billionaire, Elon Musk, has slashed jobs in a cost-cutting spree.Data from the latest monthly Challenger jobs report suggests Doge has been responsible for 281,452 job cuts so far – almost eight times the number of workers the government let go in the entire year to April 2024.Brendan Demich is among those to be dismissed, losing his job as an engineer at the National Institute for Occupational Safety and Health (NIOSH) in Pittsburgh, Pennsylvania. All his colleagues working on mine safety, as well as those in their sister laboratory testing equipment such as respirators, are also leaving – more than 200 in total – as part of a wave of cuts initiated by Trump’s health secretary, Robert F Kennedy Jr.“So many people are devastated,” says Demich, chief steward of the local AFGE union branch. He says so many workers have been removed at once that their colleagues have barely been able to give them any kind of send-off. “It’s just unceremoniously leaving, because they had their package processed and they had to walk out the door.”Each of these cuts has its own human impact, but experts are warning of a growing risk that they combine to trigger an economic retrenchment – particularly in areas with a heavy concentration of government jobs.View image in fullscreenLiz Shuler, the president of the AFL-CIO federation of 63 trade unions, which together represent more than 15 million US workers, is trying to build a nationwide campaign to highlight the devastating impact.“The trick is connecting the dots because there’s already a national narrative around what’s happening but it’s not quite being felt yet,” Shuler says. “Elon [Musk] has his ‘department of government efficiency’. We established the ‘department of people who work for a living’. That’s kind of cheeky, but it’s kind of serious, because we’re saying we’re the ones working on the frontlines. We know what’s efficient and what’s not.“Obviously as the labour federation we’re worried about jobs and people’s livelihoods, but it’s also connected to community, and the fact the economy is being impacted in such a stark way, that ripples out across all of the industries that we represent,” she adds.These ripples are being felt especially strongly in the towns and counties around Washington DC, where job losses and government cuts crop up constantly in conversation.Kate Bates is the president of the chamber of commerce in affluent Arlington, Virginia, across the Potomac River from the US capital. She compares the current uncertainty to the pandemic, “but during Covid, the federal government was the backstop, whereas right now it’s the federal government that’s causing a lot of this,” she says.Bates reports that her members are warning of a slowdown across real estate and hospitality, as well as among government contractors, with several reporting they have already had to make job cuts.“What we hear from a lot of people is that if they could plan for the cuts, they would be in an OK position, right? But because things are changing, going back and forth, that’s causing a lot of stress,” she says.View image in fullscreenBusinesses that rely on government workers for custom are also feeling the chill. Saamir Nizam, the general manager of Arlington’s Barley Mac restaurant, which is part of a small family-owned chain, has noticed trade declining in just about every one of their usual customer groups.The nearby hotels are less occupied; bookings for “happy hour parties” by the accountants and consultants who serve the federal government are down by two-thirds; and many older local residents have been spooked by market volatility.“We can only do so much to turn things around: we can’t pull people to Washington, or convince companies to go out and do things,” Nizam says. “Barley Mac serves great food, it gives great service, but it exists, like many restaurants, on the financial margin. And if the whole year is on the margin then restaurants like ours will go under, because we’re not part of a huge national chain which has deep pockets.”View image in fullscreenJess Miller, who set up Rock Spring Real Estate Solutions a couple of years ago, has been hosting a breakfast roundtable for clients, on the top floor of an as yet unoccupied new office block in Arlington.skip past newsletter promotionafter newsletter promotionShe has noticed clients responding to the shifting climate, pulling out of deals and hoping to negotiate unusually short leases. The owners of this building are splitting the floors instead of looking for one anchor tenant.“Just how they’re making decisions is different – the cutbacks we’re seeing,” Miller says. “It hit the NGOs first and then it hit, you know, the corporations and the contractors, and it’s a lot of the senior management.”Katherine D’Zmura Friedman is a co-founder and the chief executive of Thumbprint, an Arlington-based startup offering an artificial intelligence platform for designing office layouts.View image in fullscreen“There’s no universe in which something like the last few months happens and there’s not serious consequences,” she says. “We’ve had family friends, we’ve had neighbours lose their jobs, and these are not people who would normally be subject to layoffs. These are people who are at the peak of their career, and hyper-specialised.”As far as the business effects are concerned, D’Zmura Friedman says: “Certainly on the commercial side, there’s been hesitancy about launching into things.”At her office nearby, Renata Briggman, a residential estate agent, plays down the idea that the housing market in Arlington could be hit, pointing to the many local employers broadly unaffected by federal spending – such as Amazon, which is headquartered here.However, she does acknowledge signs of change. “It’s definitely shifting. We’re not seeing any fire sales, it’s too soon for that. It’s very, very slow, and we’re just going to start seeing it, it’s just on the cusp … end of June, we’ll have a better idea.”View image in fullscreenSuch challenges are being replicated across the region. Jimmy Olevson, the president and chief executive of National Capital Bank, which serves Washington DC and the surrounding areas, says the bank is not yet seeing signs of financial distress, such as rising arrears, but the mood is “uneasy”. Many customers who have had a recent mortgage application approved seem to have put house-hunting on hold.Some experts fear this widespread mood of unease bodes badly for the coming months. Analysis by Dr João Ferreira, an expert in regional economics at the University of Virginia, suggests more than 320,000 people in the state are employed directly by the federal government – and another 441,000 jobs depend on taxpayer-funded contracts, of the kind that are being cut.In some sectors – construction, for example – the same firms fretting about whether their contract will be cut are also contending with the rising price of materials, as a result of tariffs. Although some of the border taxes have been paused or reduced, those restrictions that remain mean costs are still far higher than at the start of the year.In theory, the Trump administration could lift the gloom by drawing a line under budget cuts as Musk heads back to his day job running the electric carmaker Tesla. But key members of the cabinet, including Kennedy and the defence secretary, Pete Hegseth, have boasted of how much they plan to slash from their budgets – and White House trade policy continues to see-saw.Ferreira says: “I think, as an economist, I’ve never seen so many things happening at the same time. But they all lead to the same direction, and that’s a recession.”He says Virginia has often been cushioned from economic downturns in the past by federal funding, but in this cycle he expects the state to lead the way. “We definitely might see that Virginia, and other regions like Maryland, will be the frontrunners in this recession period,” Ferreira says.Meanwhile, for many of the affected individuals, the future looks highly uncertain – despite the US treasury secretary Scott Bessent’s suggestion they should go work in manufacturing. “For us on our team, we work in international development,” says Anderson. “We have a background in humanitarian work, and the Trump administration is trying to cut international foreign aid. So where do you go from there?” More

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    China and US agree 90-day pause to trade war initiated by Donald Trump

    China and the US have agreed a 90-day pause to the deepening trade war that has threatened to upend the global economy, with reciprocal tariffs to be lowered by 115%.Speaking to the media after talks in Geneva, the US treasury secretary, Scott Bessent, said both sides had shown “great respect” in the negotiations.Bessent said: “The consensus from both delegations this weekend was neither side wants a decoupling.”The 90-day lowering of tariffs applies to the duties announced by Donald Trump on 2 April, which ultimately escalated to 125% on Chinese imports, with Beijing responding with equivalent measures.China also imposed non-tariff measures, such as restricting the export of critical minerals that are essential to US manufacturing of hi-tech goods.The US trade representative, Jamieson Greer, said China’s retaliation had been disproportionate and amounted to an effective embargo on trade between the world’s two biggest economies.With the 115% deduction, Chinese duties on US goods will be lowered to 10%, while the US tax on Chinese goods will be lowered to 30%. That is because the US tariffs include a 20% rate imposed by Trump before the latest trade war, which the president said was related to China’s role in the US’s fentanyl crisis. The fentanyl-related tariff will still apply.A spokesperson for China’s ministry of commerce said: “This move meets the expectations of producers and consumers in both countries, as well as the interests of both nations and the common interest of the world.“We hope that the US side will, based on this meeting, continue to move forward in the same direction with China, completely correct the erroneous practice of unilateral tariff hikes, and continually strengthen mutually beneficial cooperation.”China’s yuan jumped to a six-month high on the signal that the trade war would be paused. Up to 16m jobs were at risk in China, according to some estimates, while the US faced rising inflation and empty shelves thanks to dizzying tariffs on the biggest supplier of US goods.Bessent said he was impressed by the level of Chinese engagement on the fentanyl issue during the talks in Switzerland. “For the first time the Chinese side understood the magnitude of what is happening in the US,” Bessent said.A joint statement published by the US and China on Monday said that both sides would “continue to advance related work in a spirit of mutual openness, continuous communication, cooperation and mutual respect”.William Xin, the chair of the hedge fund Spring Mountain Pu Jiang Investment Management, told Reuters: “The result far exceeds market expectations. Previously, the hope was just that the two sides can sit down to talk, and the market had been very fragile. Now, there’s more certainty. Both China stocks and the yuan will be in an upswing for a while.”skip past newsletter promotionafter newsletter promotionHu Xijin, the former editor of the nationalist Chinese tabloid the Global Times, said on social media the agreement was a “great victory for China in upholding the principles of equality and mutual respect”. Hu noted on Weibo that the recently agreed UK-US trade deal maintained the US’s 10% tariff on UK imports, “while the UK did not implement reciprocal measures”.Wang Wen, the head of the Chongyang Institute for Financial Studies at Renmin University in Beijing, said: “This is an unexpected achievement in Sino-US tariff negotiations.”However, Wang also urged caution, as he said the agreement “does not represent the resolution of the structural contradictions between China and the United States, nor does it mean that there will be no friction and serious differences between China and the United States in the future”.Stock markets across Europe rose in the aftermath of the US-China announcement. Germany’s DAX index jumped by 1.5%, with Mercedes-Benz, Daimler Trucks and BMW among the biggest risers. France’s CAC index rose by 1.2%.Additional research by Lillian Yang More

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    Why is Trump so fixated on toys for little girls? | Moira Donegan

    Donald Trump has found a new target for his trademark mockery and dismissal: little girls.In comments at a 30 April cabinet meeting, the president seemed to dismiss the economic impact of his chaotic tariff regime on American consumers by citing girls as the primary complainants. “Somebody said, oh, the shelves are going to be open,” Trump said. “Well, maybe the children will have two dolls instead of 30 dolls. And maybe the two dolls will cost a couple bucks more than they would normally.”Trump is prone to odd non-sequiturs, but the dolls have become something of a sticking point. Onboard Air Force One on 4 May, he doubled down on his insistence that American girls should have fewer toys. “All I’m saying is that a young lady, a 10-year-old girl, nine-year-old girl, 15-year-old girl, doesn’t need 37 dolls,” he told reporters. “She could be very happy with two or three or four or five.”In an interview with Kristen Welker of Meet the Press that same day, Trump again mentioned the dolls. “I don’t think a beautiful baby girl needs – that’s 11 years old – needs 30 dolls,” Trump said. “I think they can have three dolls or four dolls because what we were doing with China was just unbelievable.” He went on to assert that American children also have too many pencils. “They don’t need to have 250 pencils. They can have five.”In some respects, the comments seem like a rare bit of honesty from the president: an acknowledgment of the reality that his tariffs will hurt consumers and lower the American their standard of living. With steep tariffs on many consumer goods, particularly those made in China, and supply chain issues caused by retailers and producers frantic attempts to offset the costs of the new tariffs, many common products – yes, including children’s toys – will become shorter in supply and steeper in cost. Because of Trump’s policies, it is indeed true that there will be fewer presents for children underneath American Christmas trees this year – a trend that is likely to continue for years to come if Trump’s trade war triggers an economic recession, as is widely expected. Americans themselves don’t have much say in this, but Donald Trump wants us all to know that he’s comfortable with us, and our children, having less.But the selection of dolls, in particular, as Trump’s stand-in for consumer prices reflects the gendered ideas about work, money and purchasing that animate Trump’s chaotic economic policy. After all, Trump did not talk about the impact of his trade regime on toy trucks or GI Joe action figures – and he certainly didn’t mention its likely impact on things like video games, basketballs, squat racks or protein powders. The tariffs will increase prices across economic sectors and hurt consumers of all kinds of goods. But Trump did not speak in general terms about those who might like to buy a house one day, or about who will be hurt by his tariffs on Canadian lumber, or about those who would like to be treated for their illnesses but who have to pay steeper prices for the medicines they need when tariffs hit pharmaceuticals. He didn’t talk about any of the consumption that Americans are uniformly agreed to think of as reasonable, dignified or aspirational. He chose, instead, something seen as trivial, childlike, and only for girls.The comments aim to cast the pain that consumers will face as ultimately feminine and frivolous, their complaints petulant and childlike. In this respect, Trump is drawing on a long tradition of economic rhetoric that aims to cast consumption as feminine, decadent and morally suspect – and to contrast it with the supposedly more manly and virtuous productive side of the economy. It’s a laughably stupid symbolism, one that only works for those deeply committed to their ignorance about how the economy actually works: in truth, everyone consumes, and people of all genders participate in the productive economy. But Trump does not argue based on the facts: he asserts dominance. And here, he casts those Americans who would complain about the economic pain that he is inflicting on them as feminine and hence as contemptible, deserving no more respect than spoiled children.The project of masculinizing the economy – perhaps especially at children’s expense – is one that the Trump administration seems to be pushing more broadly. Trump claims, despite the near-universal assertions of economists to the contrary, that his tariffs will shift the US away from the primarily female service sector industries that have dominated the American economy since the 1970s back to a more masculine manufacturing base.To this end, his commerce secretary, Howard Lutnick, a billionaire former CEO, went on MSNBC late last month to describe his vision for the future of the American worker. “It’s time to train people not to do the jobs of the past but to do the great jobs of the future,” Lutnick said, arguing that fewer people should be aspiring to bachelor’s degrees and should expect to occupy themselves in lower-skill factory work instead. “This is the new model, where you work in these kind of plants for the rest of your life, and your kids work here, and your grandkids work here.”This is the vision for your children’s future that the Trump administration wants to put forward: deprived of material comforts and joy in childhood, then deprived of the hope for upward mobility in adulthood. They want you, and your kids, to be poor, desperate and ignorant. They want you to work in repetitive, dangerous, back-breakingly physical jobs, and they want you to have no aspiration to anything better. They want you to imagine your future, and your children’s futures, not as an open horizon of freedom and potential, but as a dark and desperate struggle, devoid of the notion that we might be anything more than useful instruments for the needs of capital. What do they offer Americans as compensation for this loss? Virtually nothing, aside from misogynist contempt, and the assurance that as our living standards sink and our prospects disappear, in our suffering, at least, we are masculine.On Fox News this past Tuesday, the treasury secretary, Scott Bessent, tried to put this spin on things. Describing what he would say to a little girl who would be denied dolls because of Trump’s tariff policy, Bessent insisted that it was for her own good. “I would tell that young girl that you would have a better life than your parents,” Bessent said. But the Trump administration is doing everything in its power to ensure that America’s children – and in particular, its little girls – have it worse.

    Moira Donegan is a Guardian US columnist More

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    Federal Reserve warns of inflation and jobs risks amid Trump’s erratic trade strategy

    The Federal Reserve kept interest rates on hold and called out growing dangers in the US economy amid Donald Trump’s erratic rollout of an aggressive trade strategy.Jerome Powell, the US central bank’s chair, cautioned that the president’s tariffs were likely to raise prices, weaken growth and increase unemployment if maintained.Fed policymakers cautioned that “the risks of higher unemployment and higher inflation have risen” as they opted to maintain the benchmark interest rate for the third time in a row. “Uncertainty about the economic outlook has increased further,” they said in a statement.With inflation expectations – how consumers think prices will move – rising,Powell, the Fed chair, said the “driving factor” appeared to be Trump’s tariffs.At a press conference, he said: “If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.”The US president has repeatedly demanded in recent months that the Fed cuts rates – and even raised the prospect of firing Powell, before walking back the comments – as Trump’s tariffs plan appeared to knock the US economy.The Fed has been sitting on its hands for months, however, citing heightened uncertainty. It last cut rates in December, to a range of between 4.25% and 4.5%.As Trump pushed ahead last month with sweeping tariffs on imported goods from much of the world, Powell cautioned this would probably raise prices and slow growth – despite the administration’s pledges to revitalize the US economy and reduce the cost of living for millions of Americans.US gross domestic product (GDP) shrank for the first time in three years during the first quarter, raising fears of recession as Trump’s tariffs – and threats of tariffs – cast a shadow over the world’s largest economy.Asked whether he was trying to take responsibility for stronger parts of the economy, while blaming his predecessor, Joe Biden, for any sign of weakness, Trump told NBC’s Meet The Press: “I think the good parts are the Trump economy, and the bad parts are the Biden economy. Because he’s done a terrible job.”After Fed policymakers finished their latest two-day meeting on Wednesday, the central bank reiterated in its statement that they would “carefully assess incoming data, the evolving outlook, and the balance of risks” ahead of future meetings.Its callout of greater risks in the US economy amounted to “a thinly veiled critique of the new administration’s import tariffs”, said Samuel Tombs, chief US economist at Pantheon Macroeconomics, “and represents an assertion of independence”.Addressing reporters after the meeting, Powell said he could not provide a timeframe for rate cuts. “We are going to need to see how this evolves,” he said. “There are cases in which it would be appropriate for us to cut rates this year. There are cases in which it wouldn’t. And we just don’t know.”While concern over the economic outlook is mounting, Powell stressed there had been no “big economic effects” in the data so far. “People, they are worried now about inflation, they are worried about a shock from the tariffs,” he said. “But they really haven’t – that shock hasn’t hit yet.”Asked how Trump’s demand for rate cuts affected the Fed’s latest decision, and the difficulty of his job, Powell responded bluntly. “Doesn’t affect doing our job at all,” he said.He reserved perhaps his briefest response for when a reporter asked what he thought when Trump said last month he had “no intention” of firing him – days after saying his termination could not come fast enough. “I don’t have anything more for you on that,” said Powell. More