Member Briefing March 11, 2025
Inflation In Center Focus Amid Tariff Fears
Stocks sank last week as a lack of clarity around President Donald Trump's tariff plans and what they could mean for the economy's overall trajectory gripped markets. In the week ahead key updates on inflation, with fresh readings on the Producer Price Index (PPI) and Consumer Price Index (CPI), will be in focus as investors look for any clues on how tariffs may impact the path forward for prices. Updates on inflation expectations and consumer sentiment are also on the calendar.
Wall Street economists expect February's CPI to show headline annual inflation of 2.9%, down from the 3% seen in January. Prices are anticipated to rise 0.3% on a month-over-month basis, per economist projections, below the 0.5% increase seen in January. On a "core" basis, which strips out food and energy prices, CPI is expected to have risen 3.2% over last year in February, below the 3.3% seen in January. Monthly core price increases are anticipated to clock in at 0.3%, below the 0.4% seen the month prior. Wells Fargo senior economist Sarah House wrote in a note to clients that the February CPI print is only expected to provide an "initial taste" of expected tariff impact on inflation data.
Month-to-Month Retail Sales Dipped in February, NRF Says
Retail sales declined last month, according to new data, weighed down by tariff concerns, rising unemployment, and harsh winter weather. Total seasonally adjusted retail sales excluding automobiles and gas were down more than 0.2% in February from January, according to the National Retail Federation's Retail Monitor, a measure of monthly retail sales based on credit and debit card purchase data. That followed a larger month-to-month decrease in January, but also reflected a more-than-3% unadjusted year-over-year increase.
The news comes ahead of the latest monthly Census Bureau data, which for January showed retail sales down almost 1% from December. And it follows recent readings on consumer confidence, which last month registered the largest monthly decline since August 2021, according to the Conference Board’s survey.
Bond Markets Brace For Growth Slowdown
Bond traders have been preparing for a potential downturn in the U.S. economy in light of recent chaotic tariff decisions, even as the Trump administration seeks to deflect these concerns. When asked if he was expecting a recession, President Donald Trump said he "hates to predict things like that" and said "there is a period of transition because what we're doing is very big." Commerce Secretary Howard Lutnick has declared that "there's going to be no recession in America." He told NBC News Trump plans to grow the U.S. economy "in a way we've never grown before." The official also insisted that while some foreign-made products might be more expensive, American products will get cheaper.
But bond traders appear to be more pessimistic and are increasingly buying short-dated Treasuries, with the two-year yield (US2Y) declining sharply over the last two weeks. The US2Y, which is most sensitive to interest rate outlook, is currently 5 basis points lower at 3.95%, while the 10-year yield (US10Y) is down 5 bps at 4.25%. This is despite inflation expectations remaining high due to tariffs and immigration policies, indicating that bond traders are focusing more on long-term growth concerns. The odds of a recession remain low, but there are signs of economic slowdown. The Atlanta Fed's GDPNow model expects the economy to contract 2.4% in the first quarter. "While the headline number is scary, and those more pessimistic have used it to build their case for an imminent recession, the details are far less ominous," Investing Group Leader Lawrence Fuller said. "The sharp contraction was due largely to a huge trade deficit at the start of the year, which subtracted approximately 3.5% from GDP, as U.S. businesses ramped imports to front run Trump's tariffs."
Global Headlines
Middle East
- Israel's Halt To Food And Aid Deliveries Worsens Gaza Conditions – Reuters
- Iran Signals Openness to Limited Nuclear Talks With U.S. - NYT
- Houthis Threaten New Ship Attacks - Newsweek
- Trump Envoy Describes Recent Meeting With Hamas As 'Very Helpful' - VOA
- Fierce Fighting With Assad Supporters Poses Toughest Test for Syria’s New Rulers - WSJ
- New Syrian Leader Sharaa Says Killings Of Alawites Threaten Unity, Vows Justice - Reuters
- Syria Leader Vows To Hunt Down Those Responsible For Bloodshed - BBC
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Ukraine ‘Committed’ To Dialogue With US, Zelenskyy Says Ahead Of Saudi Talks– Politico
- Ukraine Readies for Make-or-Break Saudi Showdown With Trump Team - Newsweek
- Trump Says US Has "Just About" Ended Pause On Ukraine Intel Sharing - Reuters
- Russia Trots Out Its Newest Weapons in Ukraine: Horses - WSJ
- Europe Faces Stark Choices Over Russian Asset Seizure - Reuters
- Countries Can't Be Forced Into Ukraine Peace Coalition – Minister - BBC
- US Dominates European Weapons Purchases: Report - Politico
- Rebuilding Ukraine Steel Capacity Hinges On Security Guarantees, Metinvest CEO Says – Yahoo Finance
- Johnson Says Zelensky Has Done ‘About-Face’ On Mineral Deal – Yahoo Finance
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- The 'Anti-Trump' Numbers Man Who Will Lead Canada – BBC
- Von der Leyen’s First 100 Days: Her Promises, Big Wins And Fizzles - Politico
- Carney Says Canada’s Tariffs To Stay Until US Shows ‘Respect’ – Yahoo Finance
- Pope Francis, Starting Fourth Week In Hospital, Showing Improvement, Vatican Says - Reuters
- Far-Right Frontrunner Călin Georgescu Blocked From Romanian Presidential Race - Politico
- Crews Accounted For After Tanker And Ship Collide - Yahoo
- China Is Waging a ‘Gray Zone’ Campaign to Cement Power. Here’s How It Looks. - WSJ
- China Vows Utmost Efforts For 'Peaceful Reunification' With Taiwan – Reuters
Policy and Politics
Days From Partial Government Shutdown Deadline, Here's Where Things Stand
House Speaker Mike Johnson, R-La., is gearing up for a vote on Tuesday on a bill, which, if approved, will avert a partial government shutdown during the first 100 days of President Donald Trump's term. Given the lack of support from Democrats, Johnson is betting Republicans can muscle through largely by themselves on the 99-page piece of legislation that would keep federal agencies funded until Sept. 30.
Congress must act to avoid a partial government shutdown by Friday, March 14. Despite dozens of conservative defections on continuing resolutions over the past two years, Trump on Saturday called for Republicans to unite to support the bill. In a call with reporters on Saturday, House Republican leadership aides outlined how the bill provides for $892.5 billion in discretionary federal defense spending, and $708 billion in non-defense discretionary spending. The top Democrats on the House and Senate Appropriations Committees, Connecticut Rep. Rosa DeLauro and Washington Sen. Patty Murray, both issued statements blasting the legislation. Murray said the legislation would "give Donald Trump and Elon Musk more power over federal spending — and more power to pick winners and losers, which threatens families in blue and red states alike." DeLauro, in an X post, called the CR "a power grab for the White House."
Siena Poll: Hochul Gets Mixed Grades, Leads Big Among Primary Challengers
In a hypothetical 2026 Democratic primary, Governor Kathy Hochul has the support of 46% of Democrats, with a commanding lead over Lt. Governor Antonio Delgado, 11%, and Rep. Ritchie Torres, 10%. Hochul’s favorability (40-50%) and overall job approval (46-48%) ratings are little changed from last month. On three specific issues – protecting constitutional rights, ensuring access to quality, affordable healthcare, and making New York safer – Hochul has a positive job approval rating, but on making New York more affordable, she’s underwater by 11 points, according to a Siena College poll of New York State registered voters.
“While Trump’s favorability rating barely moved since last month, his overall job approval rating took a little hit since February, largely as a result of Republican approval ‘falling’ from 86-10% approval last month to 78-20% approval this month,” Greenberg said. “His approval rating also fell in the downstate suburbs, from 58-41% last month to 46-51% today.” Democrats in Congress have a 45-48% favorability rating, nearly identical to 45-47% last June. They’re viewed favorably by Democrats, 71-25%, and unfavorably by 79% of Republicans and 61% of independents. Republicans in Congress have a worse favorability rating, 34-56%, which is up from June’s 29-62%. They’re viewed favorably by 76% of Reps, and unfavorably by 83% of Dems and 43% of independents, a plurality.
Read more at The Siena College Research Institute
New York Democrats Say Threat Of Medicaid Cuts Not A Factor In State's Budget
The specter of federal cuts to Medicaid is looming over New York’s fiscal future. But state officials are loath to start preparing for a potential funding drop before concrete details are unveiled. At the state Capitol, where negotiations on New York’s $252 billion fiscal plan are set to begin in earnest next week, lawmakers have signaled that they will not at this time be accounting for any potential future federal spending reductions. Assembly Speaker Carl E. Heastie, a Bronx Democrat, told reporters earlier this week that his colleagues will proceed as planned with the state’s annual budget process without considering federal cuts.
New York has one of the most expansive and richly funded Medicaid program in the United States, with a budget of $123 Billion and per-capita spending 82% higher than the national average. In the last 4 budget cycles New York State Medicaid spending has increased by 59%.
Read more at the Albany Times Union
Trump’s First 100 Days
- Rubio Heads To Saudi Arabia For US-Ukraine Talks, Then Canada For G7 – VOA
- Trump Touts ‘Incredible’ Job Gains In Manufacturing After First Jobs Report Of His Second Term - AP
- Turmoil Within DOGE Spills Into Public View As Musk's Group Confronts PR Crisis - Yahoo
- Why This Year's Hottest Election Is For A Wisconsin Court Seat - Axios
- Trump Administration Reportedly Detains Green Card Holder Who Led Columbia’s Pro-Palestinian Protests - Forbes
- Trump Says US Economy In 'Transition' As Trade War Escalates - BBC
- House GOP Funding Bill Includes Defense Increase – The Hill
- Secretary Of State Rubio Says Purge Of USAID Programs Complete, With 83% Of Agency’s Programs Gone - AP
- Hollywood Pivots to Programming for Trump’s America - WSJ
- Trump Creates a ‘Strategic Bitcoin Reserve’ – The Dispatch
- Courts Grapple With ‘King’ Trump – The Hill
- The Most Liked Man in D.C. Might Be This Silver-Haired Russian Ready to Reset NHL History - WSJ
Health and Wellness
Maryland Confirms Measles Case, And Travelers At Dulles May Have Been Exposed
A Howard County resident tested positive for measles after returning from international travel, and people may have been exposed to the highly contagious disease at Dulles International Airport and a hospital emergency department, according to the Maryland Department of Health and Howard County health officials. The Virginia Department of Health, the Maryland Department of Health and Howard County health officials are looking to identify people who might have been exposed, including contacting potentially exposed passengers on specific flights.
Anyone who visited the following locations during the following hours may have been exposed:
Dulles International Airport (IAD)'s Terminal A on transportation to the main terminal and in the baggage claim area between 4 p.m. and 9 p.m. on Wednesday, March 5
Johns Hopkins Howard County Medical Center Pediatric Emergency Department on Friday, March 7 from 3:30 p.m. to 7:30 p.m.
Anyone who has not received the measles, mumps and rubella (MMR) vaccine or another measles vaccine offered in another country may be at risk of developing measles, the Virginia Department of Health said in a release.
Read more at NBC4 (Washington DC)
Industry News
Canada Slaps Electricity Tariffs On New York, Minnesota, Michigan
The government of Ontario is applying a 25 percent surcharge starting Monday on electricity exports to three U.S. states in response to U.S. tariffs on Canada. This surcharge will affect electricity sales for 1.5 million homes and businesses across Michigan, Minnesota and New York, the Ontario government said. In total, it could cost up to $400,000 per day. New market rules are going into place requiring Canadian electricity sellers to add a $10 per megawatt-hour surcharge, equivalent to a quarter of the electricity’s average value, to the cost of power for sales to the U.S., according to a statement from Ontario’s office of the Premier.
The U.S. is Canada’s only trading partner for electricity, and the Canadian and U.S. electrical grids are highly integrated. In 2023, net electricity exports from Canada to the U.S. were 27.6 terawatt hours and came mostly from the provinces of Manitoba, Ontario, British Columbia and Quebec, according to the Canadian Energy Regulator. The regulatory order from Ontario’s executive council says that the U.S. is ignoring the rule of law by imposing the tariffs on Canada. The regulation also says that “tariffs pose an existential threat to hundreds of thousands of jobs and whole sectors of the Ontario economy.”
Global Manufacturing Is Repositioning — But It’s Complicated
The shifting dynamics of global manufacturing and supply chain strategies have created an unprecedented moment of change for logistics professionals, businesses and policymakers alike. The China Plus One strategy, which encourages companies to diversify their manufacturing footprint beyond China, has gained traction due to rising labor costs, trade policy uncertainties and geopolitical tensions.
For years, multinational manufacturers have explored alternatives to China, but recent trade disputes and tariff policies have accelerated the transition. According to Kathy Liu, global sales and marketing director at Dimerco, the strategy began with labor-intensive industries, such as textiles and footwear, moving to countries like Vietnam and Thailand. More recently, high-value sectors, including electronics and semiconductors, have started shifting production to new markets. However, this transition is not merely a cost-cutting maneuver; it represents a structural shift in global supply chains that requires long-term planning and investment.
Volkswagen And Stellantis Evade Trump’s 25% Tariffs, While BMW Braces For Impact
Automakers Volkswagen and Stellantis have confirmed that their vehicles made in North America will be exempt from U.S. President Donald Trump’s newly rolled out 25% tariffs, while BMW says it will face levies, as European car manufacturers grapple with new trade rules. The threat of import tariffs has raised alarm bells in Europe, as vehicles and machinery are the European Union’s biggest exports to the United States. In 2023, the EU had a 102 billion euro ($110.6 billion) trade surplus in machinery and vehicles with the U.S., with the category accounting for 41% of its exports to America.
However, some of the region’s automaking giants may be able to — at least temporarily — skirt around the new duties. Last week, the White House granted a one-month tariff delay to automakers whose vehicles comply with the United States-Mexico-Canada Agreement, or USMCA — a trade deal between the three countries. Under its terms, if at least 75% of a vehicle’s parts originate from North America, it can be exempted from new tariffs imposed on imports from Canada and Mexico. “Our North American assembled VW-brand vehicles meet the USMCA rules of origin and are exempted from the 25% tariffs,” a Volkswagen spokesperson said in an emailed statement.
Boeing Seeks Plan B After Fire Destroys Key Supplier’s Plant
A fire tore through an airplane-parts factory last month in suburban Philadelphia, decimating the century-old plant. Boeing e has been racing ever since to size up whether it will delay the jet maker’s turnaround plans. Equal in size to about 10 football fields, the factory, operated by a Berkshire Hathaway company, was the sole supplier of some critical fasteners used in Boeing planes. Fallout from the blaze now threatens the aerospace company’s effort to get its manufacturing operations back on track.
Boeing is searching to find alternative suppliers, but replacing the parts isn’t an easy task. Many might look like typical bolts, but the fasteners must be manufactured to hold up to the demands of air travel, and some of the designs are complex. They are used in jet engines, landing gear and other parts of the plane. The plant’s loss won’t have an immediate effect on production, the company said, but suppliers and analysts expect fallout as Boeing works through its parts supply.
Why There Will Soon Be More Airbus A320s Flying Than Boeing 737s
The world's two most popular commercial aircraft in production and the world's most numerous commercial passenger jets in service today are the Airbus A320 family and the Boeing 737 family of aircraft. For years, the Boeing 737 has been the most produced commercial jet, however that is about to change. The Boeing 737's production has been suppressed for the last six years, bringing forward the date that the A320 overtakes it as the most delivered commercial aircraft in history. Still, the Boeing 737 continues to be the world's second most popular passenger jet with Boeing working to ramp up deliveries.
Far more Boeing 737s have been retired than their newer A320 counterparts. For years now, the A320 has attracted more orders, and it has been delivered in greater numbers. The A320 family can already claim to have more aircraft in operation than the Boeing 737. But the Boeing 737, with a head start in production for the better part of two decades, has been able to claim greater cumulative deliveries. It has been able to claim to be the most produced and delivered commercial jet in history. However, that is soon to change as the A320 is poised to wrench that accolade from the Boeing 737.
Siemens Opens California, Texas Facilities
Automation company Siemens said it opened two electrical equipment manufacturing facilities in California and Texas last week as part of its smart infrastructure business. The company unveiled a 100,000-square-foot hub in Pomona, California, last Wednesday, the first of two phases of a $95 million expansion project, according to a press release. Siemens also opened a $190 million hub that spans 500,000 square feet in Fort Worth, Texas.
The two plants are expected to create over 900 jobs, servicing commercial, industrial and construction markets powering infrastructure such as artificial intelligence data centers. Siemens has been steadily investing in industrial AI in the U.S. for over two decades, building the technology’s capabilities to support digital innovation and regrowth in domestic manufacturing, Siemens USA CEO Barbara Humpton said in February.
Read more at Manufacturing Dive
Energy Secretary Chris Wright Vows To Reverse Biden Climate Policies, Says Renewables Can’t Replace Natural Gas
Energy Secretary Chris Wright slammed the Biden administration’s climate policies on Monday, vowing to support natural gas production. “The Trump administration will end the Biden administration’s irrational, quasi-religious policies on climate change that imposed endless sacrifices on our citizens,” Wright said at the CERAWeek by S&P Global energy conference. The energy secretary dismissed the previous administration’s focus on climate as “myopic.”
Natural gas is responsible for 43% of U.S. electricity production. There “is simply no physical way that wind, solar and batteries could replace the myriad uses of natural gas,” Wright said. The energy secretary rejected accusations that he is climate change denier. Wright has previously said there is no climate crisis and carbon dioxide emissions are not a pollutant. “The Trump administration will treat climate change for what it is — a global physical phenomenon that is a side effect of building the modern world,” Wright said. The energy secretary called Biden’s policies “economically destructive to our businesses and politically polarizing.”
This Startup Has A Way To Make Cheap, Clean Hydrogen–Without Federal Subsidies
Clean hydrogen has the potential to power a number of industrial activities. Bay Area-startup Graphitic Energy says it has a method of generating hydrogen that’s not only affordable and clean–it simultaneously produces valuable graphite. Best of all, it doesn’t need federal funding. Graphitic, which has raised $65 million from backers including Bill Gates’s Breakthrough Energy Ventures, Energy Capital Ventures and Trafigura, extracts hydrogen and carbon molecules from natural gas with a method that uses a relatively small amount of electricity, CEO and cofounder Zach Jones told Forbes.
Rather than releasing climate-warming carbon, which happens with traditional hydrogen production, or pumping it underground to keep it out of the atmosphere, which some big energy companies are doing, Graphitic turns it into graphite that it intends to sell to industrial customers. The mineral, which can sell for more than $2,500 a metric ton, is predominantly produced in China right now. To validate its technique, the company is opening a pilot plant this week at the Southwest Research Institute in San Antonio, it says can make 400 kilograms of hydrogen a day and 1,000 kilograms of synthetic graphite.