GM Dodges Tariffs With Production Shift to The US
General Motors plans to invest $4 billion in its US plants over the next two years in response to President Donald Trump's tariffs, which will expand factories in Michigan, Kansas, and Tennessee. GM's CFO Brian Jacobson spoke to Matt Miller about the production shift. (Source: Bloomberg)
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New York Times
31 minutes ago
- New York Times
A G.O.P. Plan to Sell Public Land Is Back. This Time, It's Millions of Acres.
Senate Republicans are resurrecting a plan to sell millions of acres of federal lands as part of President Trump's giant tax and spending bill, setting up a fight within the party. The proposal would require the Bureau of Land Management and the U.S. Forest Service to identify and sell between 2.2 million and 3.3 million acres of public lands across 11 Western states to build housing. Past efforts to auction off public land have enraged conservationists and have also proved contentious with some Republicans. A smaller proposal to sell around 500,000 acres of federal land in Utah and Nevada was stripped from the House version of the tax bill last month after opposition from Representative Ryan Zinke, Republican of Montana and a former interior secretary. 'This was my San Juan Hill; I do not support the widespread sale or transfer of public lands,' Mr. Zinke said last month. 'Once the land is sold, we will never get it back.' The new plan to sell public lands was included in draft legislation issued on Wednesday by the Senate Energy and Natural Resources Committee that is part of Mr. Trump's 'big, beautiful bill.' The draft envisions raising as much as $10 billion by selling land for housing in Alaska, Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming over the next five years. Notably, Mr. Zinke's home state of Montana was left off the list. Senator Mike Lee, the Utah Republican who leads the energy committee, said that the move would turn 'federal liabilities into taxpayer value, while making housing more affordable for hardworking American families.' Want all of The Times? Subscribe.
Miami Herald
31 minutes ago
- Miami Herald
Bank of America resets interest rate forecast after inflation, jobs reports
If you're hunting for a home, hoping for mortgage rates to fall anytime soon, I wouldn't hold your breath. The housing market has been dealt a double-whammy from skyrocketing home prices and high mortgage rates, making affordability a big question that's sparked considerable debate over the Fed's interest rate policy. While the Fed doesn't directly set mortgage rates, changes to its Fed Funds Rate do influence Treasury bond yields, and those yields are key to determining how much banks charge in mortgage interest. Related: Billionaire fund manager sends strong message on Fed Chair Powell's future Those who argue interest rates are too high, including President Trump, believe the Federal Reserve should cut rates immediately to reduce the risks of a recession. Others, including Fed Chairman Jerome Powell, believe patience is prudent, given that cutting rates too much could fuel inflation. Before cutting rates, the Fed wants to see more jobs and inflation data. The Fed got updated insight into inflation and unemployment this past week from the Bureau of Labor Statistics, prompting Bank of America analysts to reset their forecast. Image source:The Federal Reserve's monetary policy is designed to encourage low inflation and unemployment. Unfortunately, that's easier said than done. Raising interest rates, like in 2022 and 2023, lowers inflation, but it increases unemployment, while cutting rates lowers unemployment but increases inflation. Related: CPI inflation report resets interest rate cut bets The situation is particularly tough this year because of tariff uncertainty. President Trump has placed 25% tariffs on Canada, Mexico, and autos. He's also increased China tariffs to about 55% and instituted a blanket 10% baseline tariff on imports. The import taxes impact almost everything from cars to clothing, leading most to believe that inflation is likely to increase. Tariff uncertainty has put the Fed in a box. If it cuts rates too much, it risks fanning inflationary fires even as prices increase because of tariffs. If it doesn't cut rates, it risks falling behind the curve if unemployment worsens. The latest jobs and inflation data aren't making the Fed's decision easier. Consumer Price Index showed that inflation edged up 2.4% year over year in May from 2.3% in April, leaving it unchanged from last September. Meanwhile, layoffs continue to rise compared to last year even as the unemployment rate clocks in at 4.2%, up from 3.4% in 2023. Companies announced 696,309 lay-offs year to date through May, an increase of 80% from the same period in 2024. The inflation situation isn't all bad. The 0.1% month over month increase was below the 0.2% expected, and 2.4% inflation isn't overly concerning, except that it remains above the Fed's 2% target. Related: Fed official revamps interest-rate cut forecast for rest of this year Similarly, the jobs market isn't terrible. Yes, unemployment is up and layoffs aren't encouraging, but 4.2% is still a historically low unemployment rate. The combination may make it reasonable for the Fed to remain on pause, despite the negative impact on homebuyers and other borrowers, especially given the tariff uncertainty. "The impact of tariffs was smaller than expected in May," wrote Bank of America analysts in a note to clients. "We expect to see it more clearly starting next remain of the view that the bulk of the impact is still in the pipeline." That pipeline of inflation pressure doesn't make it likely that the Fed will reduce interest rates. However, the tame inflation reading may reduce the risk that the US economy is heading for stagflation, a period of high inflation and low or no GDP growth. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs "The benign May CPI print trims the tails of the Fed policy path distribution. Combined with the solid May jobs report, the CPI data reduce the chances of a nasty bout of stagflation," wrote the analysts. "That means a lower risk of "bad" cuts (due to a collapse in the labor market) but increased probability of "good" cuts (solid labor market and slowing inflation)." Overall, Bank of America targets inflation rising from here, keeping the Fed in the wait-and-see camp. It expects the Fed to be "on hold this year." The one bit of good news is that 2026 could be a different story. The analysts expect "100bp [ 1%] of "good" cuts next year." Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
31 minutes ago
- Miami Herald
McDonald's menu launches wild new drink
While there was a time when fast food was considered an inexpensive way to eat, that's hardly the case today. If you can believe it, a Quarter Pounder meal from McDonald's was only $5.39 back in 2014. Today, that same meal is more than $10 (it varies depending on what location you go to). Don't miss the move: Subscribe to TheStreet's free daily newsletter It's not just McDonald's that's charging more to cruise through the drive-thru. Popeyes, Jimmy John's, and Subway hiked their food prices 86%, 62%, and 39%, respectively, between 2014 and 2024, according to a FinanceBuzz study. With costs rising everywhere and customers feeling uncertain about the economy in reaction to President Trump's tariffs, many are pulling back from eating out and choosing to cook at home to save money. Related: McDonald's is facing a harsh new reality as customer behavior shifts Fast-food chains are feeling the bite of this shift in customer behavior. Even McDonald's is not immune, despite being the reigning king of the fast food world. It reported its biggest same-store sales decline since 2020 during its Q1 earnings call this year. Chains have responded by leaning into value menus and offering lower prices in their apps, encouraging loyal customers by offering them more deals. McDonald's is also working on new menu items that it hopes will bring in cost-weary customers, and it's just announced a new one. Image source: McDonald's McDonald's is hoping that the hype around the upcoming film "Jurassic World Rebirth" will help drum up some business. It's launching a new drink in the Japanese market in advance of the movie that is very Instagrammable. Called the McFizz, the drink is bright green and yellow and is served over ice or with a dollop of whipped cream on top. Related: McDonald's analyst grills new stock price target on McCrispy reaction The chain tweeted about the new drink on June 12, teasing that it will go on sale in its restaurants starting on June 18. This is not McDonald's first collaboration effort with the Jurassic Park franchise. In February of 2025, the chain announced that its Happy Meals would come packed with toys from the Netflix series "Jurassic World: Chaos Theory," with a total of 10 different toys for kids to collect. In addition to McDonald's concerning Q1 data, the fast-food chain took another blow this week when Redburn Atlantic downgraded McDonald's from a buy to a sell rating. Redburn analysts Chris Luyckx and Edward Lewis also predicted McDonald's could see its losses deepen this year as customer behavior continues to shift. "As more Americans turn to GLP-1 drugs like Ozempic to lose weight, McDonald's could see as much as a $428 million annual impact to revenue, representing about 1% of system sales," they wrote in a note. In the meantime, McDonald's is leaning into some unusual marketing in the U.S. market to make sure they stay on fans' minds. Its latest promotion to celebrate Grimace's birthday culminates June 12 in a free party in Chicago featuring musical talent Loud Luxury and Myles O'Neal. The invite encourages attendees to "come dressed to impress in your best purple fit." Related: McDonald's menu finally brings back most-wanted fan favorite The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
