Relief on interest rates could still be coming, even as President Donald Trump’s tariffs are expected to make inflation worse. But one key Federal Reserve official says there’s no “generic playbook” for the current situation.
Federal Reserve Bank of Chicago President Austan Goolsbee told reporters that Trump’s 10% global tariff will cause inflation to “materially increase,” but said he still believes the Fed will lower rates in the next 12 to 18 months. The target federal funds rate remains at 4.25% to 4.5%, higher than it’s been in recent history as the central bank aims to combat inflation.
But markets are still flailing, as stocks pared down Wednesday’s gain on Thursday. And the White House confirmed tariffs on China are actually even higher than previously announced, with a rate of 145% for many goods.
China raised its tariffs on all U.S. imports to 125% on Friday in retaliation against the Trump administration’s latest escalation of its trade war with the country, though Chinese officials indicated they do not plan to respond to any further increases in the tariff rate by the U.S. Chinese President Xi Jinping publicly commented on the worsening trade conflict for the first time, urging the European Union to side with it in pushing back against Washington.
A sightseeing helicopter crashed in the Hudson River in New York City on Thursday, killing all six people onboard—the latest in a series of aviation disasters and near misses in the past few months. Earlier in the day, two American Airlines planes clipped wings while on the runway at Ronald Reagan Washington National Airport, and though no one was injured, it was the latest alarming incident at the airport.
There was good news on the inflation front last month, as consumer prices increased less than expected year-over-year in March, though the 2.4% rate remained above the Fed’s target. Still, the numbers don’t reflect any impacts on prices from increased tariff rates, and even with the 90-day pause on many levies, the effective tariff rate will still increase by 15 percentage points, Goldman Sachs economists estimated Wednesday.
Amid the recent political controversy surrounding Tesla, the electric vehicle maker’s sales of its Cybertruck fell sharply in the first quarter of the year. According to Cox Automotive, the company delivered just 6,406 Cybertrucks this year through March, less than half of what it delivered in the third and fourth quarters of last year.
The House passed a budget plan Thursday after the vote was delayed earlier in the week as some Republicans wanted steeper cuts in spending. It’s the first step in executing President Donald Trump’s signature policy priorities, but Democrats have warned that Congress would have to slash entitlement spending to pay for the proposed tax cuts.
Members of Congress traded as much as $1.27 million worth of Tesla stock after Elon Musk endorsed Trump, the latest in a slew of conflict-of-interest concerns as Musk plays a key role in the administration. At least nine House members and one senator bought or sold Tesla shares after July 13, the day the world’s richest man endorsed Trump, and they represent both parties.
As more Americans turn to side hustles in the face of rising costs, social media is flooded with videos that promise “easy” paths to wealth. But many of the creators behind such videos are earning income from teaching others, reselling popular courses that promise to teach the foundations of building an online business.
President Donald Trump’s tariffs led to market panic, but are they legal? Conservative lawyers argue Trump is exceeding his authority by enacting tariffs under the International Emergency Economic Powers Act, which gives presidents power to take major economic steps and impose sanctions during national emergencies. But it does not say anything explicitly about tariffs.
DAILY COVER STORY
Through the Stargate Project, soon to be one of the world’s largest artificial intelligence datacenters, OpenAI will team with Oracle and Microsoft to create what they claim could be the first generation of AI models to fully surpass human cognition.
Each Stargate datacenter building will draw 100 megawatts of electricity, enough for a city of 100,000. Most of that power will come from the hundreds of 300-foot-tall wind turbines spinning in west Texas, which on most days generate far more electricity than the region needs.
Lead developer Crusoe Energy raised $3.4 billion in joint venture funding with asset management company Blue Owl Capital and data center-focused investment firm Primary Digital Infrastructure for these first two buildings. But that’s only a sliver of the $500 billion Oracle founder Larry Ellison, Softbank CEO Masayoshi Son and OpenAI CEO Sam Altman promised in January to invest over the next five years to build the future of AI and secure America’s global advantage.
But why pick relatively unknown Crusoe to build it? Oracle, Microsoft and OpenAI wouldn’t comment, but it’s clear, at least to the startup’s investors and partners, that Crusoe CEO Chase Lochmiller and cofounder Cully Cavness had the drive to build datacenters bigger and faster than they ever had before, and faith that they would find enough energy to power them. A successful outcome is far from assured, and some Crusoe clients are frustrated about what they say is the company’s less-than-reliable existing cloud computing offerings.
Even if this first phase of Stargate—which will eventually comprise 10 buildings, representing 1.2 gigawatts of computing power at a cost of an estimated $15 billion—goes off without a hitch, how could Crusoe possibly keep up the momentum and supply chains for AI’s insatiable appetite for compute and power?
WHY IT MATTERS “AI companies that were once constrained by the supply of advanced Nvidia chips face a new roadblock: power,” say Forbes reporter Rashi Shrivastava and senior editor Chris Helman. “Systems like ChatGPT consume tons of electricity, enough for tens of thousands of homes. That has translated into more opportunity for Crusoe, the $2.8 billion-valued company with a knack for finding untapped energy sources in remote places like North Dakota and Iceland and building datacenters to power compute-heavy tasks, starting with cryptocurrency mining and now running and training AI models.”
FACTS + COMMENTS
Elon Musk backed down from his latest claim that DOGE would find $1 trillion in savings before his tenure at the agency was up. Musk had already backtracked on a previous goal of $2 trillion in savings:
$150 billion: The amount in savings Musk now expects DOGE to find in the next fiscal year
130: The maximum number of days Musk can work in a 365-day period as a special government employee, meaning his government work should end by late May
280,753: The number layoffs DOGE has made across 27 federal agencies, according to one report
STRATEGY + SUCCESS
The warmer weather may inspire you to do spring cleaning around the house, but don’t forget about maintenance for your career, too. Reconnect with people in your network, update your résumé even if you’re not currently looking for a role, and if you are, create a spreadsheet to track the companies and people you’re in contact with. It’s also important to do spring cleaning on your finances so you can maximize your ability to wait for the right opportunity, and not just settle for what’s in front of you.
VIDEO
QUIZ
Prada reached an agreement to acquire another designer fashion brand for nearly $1.4 billion. Which brand is it?
A. Armani
B. Versace
C. Balenciaga
D. Fendi
Thanks for reading! This edition of Forbes Daily was edited by Sarah Whitmire.
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