Inflation fears receded in May as Trump eased some tariff threats, New York Fed survey shows
Americans grew less fearful about inflation in May as President Donald Trump backed off the most severe of his tariff proposals, according to a New York Federal Reserve survey Monday.
The central bank's Survey of Consumer Expectations showed that the one-year inflation outlook took a substantial dip, down to 3.2% — a 0.4 percentage point decrease from April.
At the three-year horizon, the outlook fell 0.2 percentage point to 3%, while the five-year forecast edged down to 2.6% from 2.7%.
While all three are still above the Fed's 2% annual target, they represent progress and a change in a fearful attitude that coincided with Trump's saber-rattling on tariffs, culminating with the April 2 "liberation day" announcement.
Trump initially slapped universal 10% tariffs on all U.S. imports and a menu of so-called reciprocal duties on dozens of nations. However, he soon backed off the latter measures, opting for a 90-day negotiating window that expires in July.
The New York Fed survey, which is less volatile than others such as the University of Michigan and Conference Board measures, provides some good news for the White House at a time when administration officials are trying to tamp down worries about tariff-induced inflation.
"By every measure of inflation, it's down by more than it's been in more than four years," National Economic Council Director Kevin Hassett said Monday morning on CNBC's "Squawk Box." "While the tariff revenue has been going up, inflation has been coming down, which is contrary to the story that everybody else has been saying, but very consistent with what we've been saying."
Inflation as measured by the Fed's preferred personal consumption expenditures price index was at 2.1% in April, matching lowest its been since February 2021. Excluding food and energy, core PCE stood at 2.5%, a gauge Fed officials believes is a better measure of longer-term trends.
The Fed survey showed expectations dipping across most price groups, though respondents did see food prices rising by 5.5% over the next year, a 0.4 percentage point increase from May and the most since October 2023. Elsewhere, respondents saw gas price increases easing to 2.7%, down 0.8 percentage point. The outlook for medical care, college education and rent increases also were lower on a monthly basis.
There also was a positive move in employment, with those expecting to lose their job over the next 12 months dipping to 14.8%, down half a percentage point.
Other areas showed optimism as well: The probability of missing a minimum debt payment over the next three months fell half a point to 13.4%, its lowest since January. Respondents also had more confidence in stocks, with 36.3% expecting the market to be higher a year from now, up 0.6 percentage point.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
28 minutes ago
- Yahoo
Can Fashion's ‘Bridges' Overcome Its ‘Barriers'?
Even Queen Mary of Denmark had nothing to say at this year's Global Fashion Summit, perhaps the industry's most boldface of sustainability conclaves. The longtime patron of the Global Fashion Agenda typically delivers a brief speech to kick things off, usually along the lines of the need for collective action for transformation to occur. Or she might joke about her daughters stealing her shoes as a form of reuse. Somewhere between the opening smooth-jazz jam and a H&M Foundation-helmed panel on operationalizing circularity, however, the royal consort slipped away from her front seat at the Copenhagen Opera House, her exit barely announced by the fading click of her stilettos. More from Sourcing Journal Refiberd Wins Trailblazer 2025 With AI-Powered Textile Recycling Global Fashion Agenda's Innovation Incubator Returns, Opens Call for Solutions What Will a Second Trump Term Mean for Fashion's Sustainability Ambitions? It was a stealthy retreat that, inadvertently or not, reflected the muted mood of the two-day conference, which one attendee described as 'somber,' another as 'a bit flat' and a third as evocative of a 'palpable decline of interest.' Fewer high-level brands abounded, a consequence of throttled travel budgets, a fear of appearing overtly political—and potentially ticking off a certain White House inhabitant—and cannibalization by concurrent events such as SXSW's first London foray and, we were told, an especially buzzy textile recycling expo in Brussels where shoulders were slapped and hands shaken over business deals. For the thousand or so people who converged on Copenhagen, just a hair fewer than those who turned up for last year's 15th anniversary, there was very little to feel celebratory about. Geopolitical turmoil, tariff uncertainty and environmental deregulation hung heavily in the air. Even attempts to put a positive gloss on corporate efforts that were already lagging before the rightwing shift in both Europe and the United States, but could now be actively backsliding, felt more perfunctory than usual. The same week, a analysis of more than 40 apparel companies found that 40 percent increased their carbon footprint versus their baseline, outlapping those on a 1.5-degree Celsius trajectory by a nearly six-to-one margin. In the latest iteration of the International Trade Union Confederation's global rights index, data showed a 'sharp escalation' in violations of fundamental labor rights, including freedom of association and collective bargaining. 'Apparently more was happening in the roundtables,' one attendee said of the closed-to-press executive-level sessions, which had the likes of Kering diving into what a just transition means in the age of climate change, Target speaking about moving production closer to consumer markets and The Fashion Pact hosting a conversation about corporate financial engagement in decarbonization. The more accessible stages—the concert hall, 'action' and 'ignite'—stuck to broader, more anodyne issues such as fiber innovations, resale, regenerative materials and the gender pay gap. The biggest ripple in all that taut placidity was occasioned by Veja co-founder Sébastien Kopp, who described sustainability as a 'bag of vomit.' Kalpona Akter's heartfelt description of garment workers' struggles in Bangladesh produced little response and, by the time the 'celebration dinner' rolled around, no offers of help that might relieve her organization's loss of funding from the U.S. Agency for International Development, or USAID for short. Eileen Fisher's call for everyone to 'show up more and collaborate more' offered a burst of inspiration. Things flattened from there. 'Some feedback I heard is that some people feel the brands are too restrained and they prefer the speakers that are more candid and speak more openly,' an attendee said. But the event's dour note was hardly unexpected. There is simply no way to spin the current climate, whether political, environmental or otherwise, no matter how many times someone insists that there is no business on a dead planet. For brands grappling with the existential threat of tariffs, sustainability has dropped several rungs in priority. The Trump administration's crackdown on so-called 'woke' notions such as climate action or DEI in the United States isn't even the half of it. In Europe, the omnibus package, a series of amendments designed to simplify—and many say water down—the corporate sustainability due diligence directive, the corporate sustainability reporting directive and other legislative instruments, threatens to unravel years of progress holding corporations liable for their environmental and social impacts. It's still unclear how other forthcoming regulations involving extended producer responsibility, greener design requirements and traceability compliance will play out. 'There's a general backlash on sustainability in Brussels,' Lara Wolters, the Dutch politician who was the European Parliament's lead negotiator on the CSDD, said at a pre-game policy masterclass at the Danish Architecture Center. 'None of this is for a good reason, but maybe to take a step back. What the Commission has done is roll out a deregulatory agenda under pressure from a lot of large lobby groups in some of the member states. The intention, I think, is to give a political signal that we, too, are going to do things differently. I would even call it a sort of 'Trump Lite.'' She said that the result of this reversal would be more paperwork and less impact, especially for small and medium-sized enterprises. For the politicians who have been clamoring for fewer guardrails, however, the 'intention is to do things as fast as possible, never mind the consequences.' Across the Atlantic, the Trump administration has pulled the United States out of the Paris Agreement (again), dismantled critical climate safeguards and obliterated other regulations governing clean water, toxic pollutants and wildlife. It has clawed back most forms of foreign assistance, including grants for programs that strengthened workers' rights and combated child and forced labor. 'I spent a good chunk of my flight over breaking through President Trump's proposed 2026 budget,' said Chelsea Murtha, senior director of sustainability at the American Apparel & Footwear Association. 'And, of course, USAID is completely eliminated, and a lot of the functions that it had are not even fully being transposed over to the State Department. The U.S., in particular, was a very large funder of the [International Labour Organization's] Better Work program, and all of that funding is gone now.' The outcome has been a 'sort of paralysis,' she said. Brands, squeezed by higher import costs, are hard-pressed to fill the breach. And while individual states could step up with rulemaking to counter the White House's actions, there's also only so much they can do. 'It's not like they can't step in and do things, but they're constricted in their authorities,' she said. 'They cannot negotiate trade deals, and they can't control imports. They can pass EPR programs, because EPR programs regulate products within their state, but what they can't do is institute something like an export ban.' On the first day of the Global Fashion Summit, themed 'Barriers and Bridges,' Federica Marchionni, CEO of Global Fashion Agenda, didn't mince words, either, calling this an 'extremely challenging time for sustainability' that is hampering fashion's ability to be a 'force for good.' At the same time, she said, the only certainty in an uncertain world is climate change. And a 'strong absence' of leadership requires 'collective courage' to build supply chain resilience. The few suppliers who spoke—their attendance likely, again, constrained by a lack of financial wherewithal—alluded to their struggles. 'The volumes are lower than they used to be a couple of years ago,' said Attila Kiss, CEO of Gruppo Florence, an integrated manufacturing hub in Italy. 'The brands are asking for lower prices because they have pressure on the margins. And from the other side, we have all the ethical issues, the social issues to manage.' In a panel that discussed Arvind Limited and Fashion for Good's plans for 'near-carbon-neutral' textile factory in India that would bring online tested and emergent solutions that could collective slash greenhouse gas emissions by as much as 93 percent, Abhishek Bansal, the former's head of sustainability, said that most of the industry's climate mitigation efforts either involve setting targets or pushing the supply chain to do so. 'Unfortunately, I have seen very little money going into helping build the hard assets that are going to actually reduce emissions,' he said. 'If you honestly ask how many industry stakeholders have set aside funds to build plants or invest in technologies to achieve those targets, I think you can count them on the fingers of one hand.' 'It's a big thing to say,' Bansal added quietly, 'but I don't think we are going to meet 2030 targets.' The dearth of representation—from suppliers, from economists, from investors—was noticeable, more than one attendee said. Speaking to an audience, Tara St. James, senior director of sustainability at the Canadian retailer Moose Knuckles, said that brands could take more responsibility for fostering inclusion by bringing their suppliers to conferences or having them speak on panels with them or in their stead. 'We talk about making changes in our supply chain, which is where most of the impact is, but then we don't invite suppliers into every conversation,' one attendee said. 'And when we do, it's usually farmers and manufacturers, which is great, but I want to hear from a mom-and-pop mill, a dye house. I want more doers on the panels. And that includes more brands.' Yayra Agbofah, founder and creative director of The Revival, an organization that tackles global textile waste in Ghana, including through the Global Change Award-winning Revival Circularity Hub, said there's a difference between being ready—say, for circularity—and showing readiness based on actions. Fulfilling the second part requires reexamining fashion's business model, which he described as a failure because it fails to recognize communities like Accra's secondhand Kantamanto Market as stakeholders. 'We are dealing with the waste we didn't create, and not having a decision on how to deal with this crisis is a big problem,' he said. 'We need to be part of the decision-making. We shouldn't be left out and be an afterthought.' It was during the Q&A portion of Agbofah's panel that Brooke Roberts-Islam, a sustainable fashion journalist and consultant, nearly leaped out of her chair. Just minutes before, Golnaz Armin, vice president of color and materials at Nike, was speaking about the footwear giant's efforts to 'imagine and create meaning' with post-consumer waste. She said that Nike's size was both its advantage and disadvantage. 'Kantamanto is the only example of a scaled circular economy,' Roberts-Islam said. 'It seems so strange to have this framing of 'Why can't we scale this up for Nike because we're such a large organization?' and, you know, a lot of Nike products end up in Accra. Kanatamanto has tens of thousands of businesses that do this. They know the answer, and Nike says you're trying to find the answer, so can you, Yayra, give Nike the answer?' One of the most incisive sentiments of the conference was uttered during the very first session, but it remains to be seen if it made an impression. 'Someone told me once that a wall lying down is actually a bridge,' said Christiane Dolva, head of innovation, research and demonstration at H&M Foundation. 'I think that some of the barriers that a lot of us feel that we're running into, which literally can be like running into the wall, can be part of the solution if we shift our perspective. We need to shift our perspective.'
Yahoo
29 minutes ago
- Yahoo
Senate GOP seeks to cut SALT cap, triggering fight with House
Senate Republicans indicated on Wednesday they are prepared to reduce the size of a key tax deduction in President Trump's 'big, beautiful bill' that was backed by moderates in the House, setting up a battle within the GOP over the divisive issue. The fight had long been expected, with senators saying they thought the state and local tax (SALT) deduction cap in the House-passed bill was too large and too expensive, but the hardening of the plan in the upper chamber threatens to delay progress on the bill and raises further questions about meeting the GOP's self-imposed July 4 deadline. 'There's a gap between where we are and where the House is. … [It's] likely going to be a lower number,' said Sen. Steve Daines (R-Mont.), a top adviser to Senate Majority Leader John Thune (R-S.D.), adding that the Senate GOP has not yet zeroed in on what that number will be. Senate Republicans emerged from a conference meeting Wednesday where key committees laid out their portions of the bill and lawmakers discussed numerous changes on the table. Several contentious issues remained unresolved, with only two legislative weeks to go until the July 4 recess. But multiple senators told The Hill that the chamber appears ready to chop down the $40,000 SALT cap, which was painstakingly negotiated between Speaker Mike Johnson (R-La.) and House GOP moderates from New York, New Jersey and California who have warned not to touch it. Senate Finance Committee Chairman Mike Crapo (R-Idaho), one of the members who led the meeting, was insistent that the cap would fall below $40,000, one Senate Republican said. It's unclear exactly what number Republicans in the upper chamber are eyeing, but Bloomberg News reported it was $30,000. 'There was never a number specifically discussed other than the House's [$40,000] — and it's a lot,' Sen. Kevin Cramer (R-N.D.) told reporters. 'No surprise that there's an interest in reducing it.' The current cap sits at $10,000, which was set in place in the 2017 Tax Cuts and Jobs Act. Senate Republicans have been fine with an increase in the cap, but many believed the $40,000 total for individuals making $500,000 or less was overzealous. A number of Senate Republicans have balked at some of the cost-cutting proposals in the bill the House sent and are looking for other ways to save money. Not a single Senate Republican hails from a high-tax blue state that would benefit from a higher SALT deduction cap. But the $40,000 figure was painstakingly negotiated by Johnson and House moderates, several of whom threatened to tank the whole bill over it. And any Senate changes would been to be approved by the House. For weeks, Republicans in the SALT Caucus have warned that they will not accept a lower cap. 'The compromise has already been made in the House. $40,000 is the figure that unlocks the rest of the bill,' Rep. Nick LaLota (R-N.Y.), a SALT member, told The Hill. 'It's not a number to be bargained down from.' The Wednesday conference meeting, led by Crapo and Agriculture Committee Chairman John Boozman (R-Ark.), also focused on other changes the Senate is looking to make to the House-passed legislation. Among those is a proposal to scale back provisions that would place more of the cost burden of the Supplemental Nutrition Assistance Program (SNAP) onto states. A number of Republican senators were turned off by the House's language. GOP lawmakers are attempting to have all portions of text by the end of next week, which is truncated by the Juneteenth holiday. But several of the issues that GOP holdouts in the Senate have named as sticking points — including Medicaid and green energy tax credits — remain unresolved. Republicans admit there is still much work to do in that time. 'Imagine a jigsaw puzzle with 3,000 pieces — and no picture,' Sen. John Kennedy (R-La.) said after the meeting. 'That's what we're trying to put together.' Sen. Markwayne Mullin (R-Okla.), a top ally of Thune, labeled that deadline for committees as an 'aspirational goal,' with the entire bill potentially hitting the floor by Monday, June 23 to kick off consideration. If that happens, a vote-a-rama could take place by that week's end. He admitted all those are lofty plans. 'We work really good on deadlines,' Mullin said. 'Without deadlines, we don't ever work.' Sen. Ted Cruz (R-Texas) said on Wednesday morning that he does not believe July 4 is a realistic deadline for the bill to hit Trump's desk given that roughly one-third of the bill is set to be revised by the upper chamber. 'And so I think the Senate will vote it out right before the July 4 recess, and then, I think it is likely that we will spend the month of July in conference and trying to reconcile the two,' Cruz said at an event hosted by Punchbowl News. 'The Senate bill is going to be markedly different from the House,' he continued. 'My guess is the Senate bill will track the House bill, maybe 60 to 70 percent. There are a lot of good provisions. A lot of the broad outlines are going to be similar, but it's the Senate. So the Senate is going to do what it damn well wants to do and that's a good process.' When asked if the deadline is realistic, Sen. Mike Rounds (R-S.D.) was unsure. 'Maybe,' he said, noting that a number of members are awaiting scoring from the Congressional Budget Office. And a number of members still need to be won over. Sen. Susan Collins (R-Maine), a key lawmaker who remains up for grabs, told reporters that she has questions about Medicaid changes and is still 'deliberating.' The possibility of work stretching close to the nation's birthday led Thune on Wednesday to warn that he is prepared to keep members in Washington until they complete work on the mammoth bill. Senators are slated to be back in their home states from June 28 through July 6 for the break, giving them just north of two weeks to get everything done. The afternoon meeting was not the only conference discussion about the sprawling bill for the Senate GOP. Border czar Tom Homan appeared hours earlier at a weekly luncheon hosted by the Senate Steering Committee, which is composed of the GOP's most conservative members. Homan pressed lawmakers to approve the tax package in order to unlock funding included for the border as Immigration and Customs Enforcement officials are running out of beds for detained migrants. According to Sen. John Hoevan (R-N.D.), Homan told members that ICE currently has 55,000 individuals detained, but only 41,000 beds. 'That's a problem,' Hoevan told reporters. 'The biggest pitch he had was: There are still about 600,000 people out there who are here illegally who have criminal records, so he needs this funding for the bed space.' More meetings are set for the coming days, including at the White House on Thursday when Thune and Crapo are expected to huddle with Trump. 'It's going to be an interesting week or two,' said Sen. Josh Hawley (R-Mo.), one of the remaining holdouts. Emily Brooks contributed. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Miami Herald
29 minutes ago
- Miami Herald
Apple WWDC underwhelms fans in a crucial upgrade
Do you know about Asch conformity experiments? Solomon Asch performed them in the 1950s. He invited individuals into the lab and asked them to judge the length of a line. He also placed 6 actors in the same room who were assigned to give the wrong answers so that the ignorant subject could hear them before he provided his own answer. On average, 35% of the subjects followed the opinions of the actors even if their answer was obviously wrong. That is horrifying. What is even worse is that the study has been replicated numerous times. Now, imagine a scenario in which the actors are given money immediately after giving the wrong answer, and the subject can see that too. What would be the percentage of subjects that gave the wrong answer then? Related: Google resolves major privacy issue That study hasn't been done, but I think we are witnessing something similar unfolding in the tech space. Marketing is everything. If artificial intelligence were called "pattern matching and transformation," it would not sound so cool, would it? Alas, there is precisely zero intelligence in AI. It is just pattern matching and transformation. This is why it hallucinates so much. The farther away from its training data the query you give to the AI is, the crazier the reply you'll get. Public companies don't do marketing just for consumers; they also need to attract investors. And when everyone around you starts hyping AI to attract investors, you may find yourself in a dilemma - is it OK to promise something you probably can't deliver? Apple (AAPL) seems stuck in this dilemma but also faces significant pressures outside Trump's threat of a 25% tariff on iPhones not manufactured in the U.S. put Apple under pressure. The company expects tariffs to add $900 million to its costs for the current quarter. I've already written why large language models can't become sentient. But Apple can't afford to say that. They carefully dance around it by occasionally releasing a research paper on AI's limitations, but that usually looks like a jab at the competition. The company's management probably feels like a person in Asch's experiment, except that the actors are the competitors. Rivals promise stuff from science fiction, but that is still attracting investors. Chaos created by unrealistic marketing is real. Microsoft recently invested in an AI company that went bankrupt. The company had no AI but a huge number of humans doing the work. Related: Elon Musk's DOGE made huge mistakes with veterans' programs Anthropic launched its AI blog in June, seemingly planning to show that AI can replace writers. They killed this project after just one week. It looks like AI companies are playing a game of telephone on the inside, and that is how that project got greenlit. More Tech Stocks: Palantir gets great news from the PentagonAnalyst has blunt words on Trump's iPhone tariff plansOpenAI teams up with legendary Apple exec Apple is held to a much higher standard by consumers than other companies. The company can't afford the luxury of delivering subpar products. In a world full of people with crippled attention spans from watching TikTok and YouTube shorts, Apple delivered an hour and a half of pure boredom. I don't have a problem watching long informative videos, but this one wasn't that. Thank you, YouTube, for the video speed settings-a lifesaver. Apple has veered off course due to pressure. Their new design language, Liquid Glass, isn't original. Windows Aero was trendy in 2006. The Linux desktop environment KDE Plasma has featured numerous transparent/glass themes over the last 17 years. Related: Nvidia's latest project may supercharge quantum computing Yes, Apple did it with more polish. But transparency and monochrome icons ruin accessibility. They are cool-looking only if you are a child. You don't have time for distractions if you have work to do. As for the big AI reveal that some people were hoping for, there wasn't one. The best feature they presented was a call translator. I am not sure how many people need it, but those who do will greatly appreciate it. Long-time fund manager Chris Versace, wrote on TheStreet Pro "It is hard to disagree, at least for now, that Apple is taking, as some have called it, a "gap year" on Apple Intelligence, but one of the great advantages the company has is its developer community and that's the core audience for WWDC." Apple used to have a slogan, "Think different." Well, if the company thinks differently, it ain't showing it. Related: Popular cloud storage service might be oversharing your data The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
