New economic data has reignited Trump's fight with the Fed over cutting interest rates
Hello. An Air India Boeing 787 bound for London crashed soon after takeoff from the city of Ahmedabad, India, this morning. More than 240 people were on board the plane, according to India's Directorate General of Civil Aviation. We are following this developing story here.
In today's newsletter, new economic data is reinvigorating the administration's fight with the Fed to cut interest rates.
What's on deck
Markets: Former Goldman Sachs interns shared advice they'd give to the bank's newest crop.
Tech: We picked 10 exciting AI agent startups from Y Combinator's spring batch.
But first, what inflation?
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The big story
A call for cutsMay's consumer price index report rose only 2.4% compared to last year, a lower-than-expected bump that had the Trump administration calling for interest-rate cuts again.
Economists predicted a 2.5% rise in inflation. Shelter, which has been a bit of a mess since the COVID pandemic, was also identified as the "primary factor" in the increase in inflation by the Bureau of Labor Statistics. Finally, core CPI, which doesn't include more volatile prices, rose only 0.1% compared to a 0.3% rise expectation.
In short, it was a good day for anyone saying inflation is no longer a problem.
Which brings me to JD Vance. The vice president bashed the Federal Reserve, posting on X that the central bank's refusal to cut rates is " monetary malpractice," writes BI's Jennifer Sor.
Vance took a page out of his boss's playbook. Last week, President Donald Trump, emboldened by weak jobs data from ADP, took a shot at Fed Chair Jerome Powell's inaction.
Of course, one key issue giving Powell pause is Trump's own doing. The president's tariffs are expected by many to drive inflation, forcing the Fed to reconsider cutting rates despite prices moving in the right direction.
At the same time, Powell has previously said he can only work with the hard data when making rate-cut decisions. And if that remains the case, the numbers don't yet show tariffs being a problem.
May's CPI report didn't indicate a major impact from tariffs. Prices fell last month for apparel, furniture, and cars despite those areas being viewed as potential victims of Trump's trade policies.
For the first time this year, Americans are feeling less anxious about rising prices, writes BI's Christine Ji.
Consumer sentiment might not seem important, but it is. The gap between the hard economic data and how consumers actually feel about the economy has been noticeable, as Jennifer and Christine have previously covered.
(Granted, not everyone is feeling good. Two recent Fed reports showed small-business owners' pain and uncertainty over tariffs.)
Ultimately, the Fed doesn't have to answer to Trump or the American people. Its focus is on keeping unemployment and inflation low.
And the market doesn't see anyone forcing the Fed's hand yet. CME FedWatch has the probability of rates remaining unchanged next week at almost 100%.
3 things in markets
1. Internship advice from Goldman Sachs insiders. Three former Goldman interns who are now an associate, a VP, and a partner shared with BI words of wisdom for the firm's new class of 2,600 summer interns. Here's what they wish they had known at that age.
2. Avala Global's inflection point. In 2022, former Viking Global star Divya Nettimi founded Avala Global, becoming the first billion-dollar launch run by a woman. The firm has seen good performance and significant staff turnover. As it approaches its third anniversary, Nettimi told BI she believes Avala is exactly where it should be.
3. Apollo ditches the PE recruiting practice that angered Jamie Dimon. This year, Marc Rowan's $785 billion asset manager won't be interviewing new analysts for jobs that start in 2027. The memo came just days after JPMorgan said it'd fire any first-year bankers with a future-dated job.
3 things in tech
1. Apple finally explains why the new Siri is still M.I.A. At Apple's 2024 WWDC conference, the company introduced an AI-powered Siri, which was met with much fanfare. A year later, the new-and-improved Siri still isn't here. Recently, Apple exec Craig Federighi has been speaking candidly about the delay. TLDR: Apple wants to get it right.
2. Microsoft is working on a version of its AI Copilot for the Pentagon. In a recent blog written for government customers, the tech giant said the Microsoft 365 Copilot for DoD environments would be available as soon as this summer, writes BI's Ashley Stewart. It's unclear if this is the mystery customer that's close to adding one million Copilot users, but regardless, the deal would be a major win for Microsoft.
3. Y Combinator asked for AI agent startups. The startup community delivered. Of the 144 startups in YC's spring accelerator program, 70 build AI agents. BI dug through the cohort to find 10 of the most interesting agentic startups, from teaching an old robot new tricks to helping consumers apply for the best mortgage.
3 things in business
1. Whole Foods x Amazon = one big ol' fam-azon. Amazon is mounting a big reorg to bring the organic grocer, which it bought in 2017, into its core business. Whole Foods corporate staff will move under Amazon's employee programs, including performance reviews and pay structure, per a copy of a company memo obtained by BI's Eugene Kim. Here's the team leading it.
2. Two major breakthroughs in cancer research. At the world's biggest cancer conference, doctors gave standing ovations to two announcements that could change the game on cancer treatment and prevention. One suggested exercise could be a solution.
3. The British can't get enough of Chinese cars. BYD sales are booming in the UK, where there are no tariffs on Chinese EVs. It's a bad sign for Tesla, whose sales are plummeting there, because it shows BYD can quickly snap up market share in a straight fight.
In other news
Trump said he will set unilateral 'take it or leave it' tariffs on trading partners in the next two weeks.
The rise of Ozempic has Americans chasing dubious muscle-building miracles.
The man behind Netflix's 'Dept. Q' thinks the future of entertainment is … games.
Victoria's Secret is cutting back on deals and discounts as tariffs hit its business.
Disney and Universal say these images show how the AI tool Midjourney steals their famous characters.
Central banks just can't get enough of gold.
Sullivan & Cromwell's Trump team makes courtroom debut in effort to clear his 34-count criminal conviction.
People are using their birth charts to figure out where to live. I was skeptical until I tried it.
A consultant who helps law firms decide which software to buy explains why legal tech is in trouble.
What's happening today
Bilderberg Meeting between US and European political and business leaders is held in Stockholm.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Lisa Ryan, executive editor, in New York. Hallam Bullock, senior editor, in London. Grace Lett, editor, in Chicago. Akin Oyedele, deputy editor, in New York. Amanda Yen, associate editor, in New York. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.
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