Member Briefing March 13, 2025
CPI = 2.8% Inflation Rate In February Less Than Expected
The consumer price index, a wide-ranging measure of costs across the U.S. economy, ticked up a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 2.8%, according to the Labor Department agency. All-item CPI had increased 0.5% in January. Excluding food and energy prices, core CPI also rose 0.2% on the month and was at 3.1% on a 12-month basis. Core CPI had risen 0.4% in January.
- Shelter costs moved up 0.3%, less than in January but still responsible for about half the monthly increase in CPI, the BLS said. The category makes up more than one-third of the total weighting in the CPI, with particular focus on a measure in what homeowners estimate they could get in rent for their properties, which also increased 0.3%.
- Food and energy indexes both increased 0.2%.
- Used vehicle prices jumped 0.9%
- Within food, egg prices soared another 10.4%, taking the 12-month increase to 58.8% and pushing a broader measure that also includes meat, poultry and fish up 7.7% on the year. Beef prices also climbed 2.4% in February.
- Motor vehicle insurance posted a 0.3% increase on the month and was up 11.1% annually.
- Airline fares slipped 4% in February and were down 0.7% from a year ago.
Medicare, Debt Service Drive US Budget To Record $1.1 Trillion for Fiscal Year So Far
The US budget deficit continued to swell in February, pushing the shortfall to $1.15 trillion over the first five months of the fiscal year, with the increasing cost of Medicare and servicing government debt contributing to the widening. For February alone, the deficit grew to $307 billion, the Treasury Department said in a release Wednesday. The gap for the fiscal year, which began Oct. 1, is 17% larger than the prior year after adjusting for differences in the calendar.
For the fiscal year to date, revenues came in at $1.89 trillion, up an adjusted 2% on 2024. Outlays totaled $3.04 trillion, and were up 7% after accounting for calendar differences. Among the categories showing the biggest increases in spending was the Medicare program, where costs for the past five months climbed by $124 billion from the prior fiscal year, to $518 billion. Interest on the public debt increased by $45 billion to $478 billion. Social Security outlays rose by $49 billion to $663 billion.
Weekly Mortgage Demand Surges 11% Higher, As Interest Rates Dropped For The Sixth Straight Week
Mortgage rates dropped to the lowest rate since October of last year, and that pushed demand even higher last week, after a substantial jump the previous week. Total mortgage applications rose 11.2% week to week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased last week to 6.67% from 6.73%, with points increasing to 0.63 from 0.60, including the origination fee, for loans with a 20% down payment. The rate was 17 basis points lower than it was the same week one year ago.
Applications to refinance a home loan, which are most influenced by weekly rate changes, climbed 16% from the previous week and were 90% higher than the same week one year ago. The vast majority of borrowers today have rates well below what is available today, but those who bought in the last two years, when rates were higher, may now be able to get some savings. The percentage increases are large mainly because the total volume is still quite low. Applications for a mortgage to purchase a home rose 7% for the week and were 4% higher than the same week one year ago.
Global Headlines
Middle East
- Iran's Khamenei Rejects Idea Of Nuclear Talks With US– Reuters
- Don’t Trust Russia to Mediate the Iran Nuclear Deal – Foreign Policy
- Yemen’s Houthis To Resume Shipping Attacks Over Gaza Aid Cutoff - AP
- Turkey, Israel Clash Over Syria's Future - VOA
- Israel And Lebanon Are Set For Border Talks - Gzero
- Iran Tells Trump: "Do Whatever The Hell You Want." - Newsweek
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Trump’s Ukraine Ceasefire Plan: What We Know So Far – Politico
- Ukraine On Verge Of Losing Kursk Pocket, Its Foothold Inside Russia - Reuters
- Rubio: Ukraine Discussed Territorial Concessions, 'Deterrence' Options - Newsweek
- Moscow Wary Of ‘Jumping The Gun’ After The U.S. And Ukraine Unite Over A Ceasefire Deal - CNBC
- A Wary Russia Waits For Details From US On Ukraine Ceasefire Plan - Reuters
- Deterrence Is A Key Issue As Army Chiefs From 30-Plus Countries Talk About A Ukraine Force - AP
- Russia Has Probably Hit All 10 Of Ukraine’s Ex-Swedish Strv 122s. But The Up-Armored Tanks Keep Fighting. - Forbes
- 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
- ICC Takes Custody Of Former Philippine President Rodrigo Duterte In Crimes Against Humanity Case - AP
- MSF Reports 150 New Cholera Cases In Haiti - VOA
- Militants Kill Some Of The Hostages On Hijacked Train In Pakistan, Authorities Say – France 24
- Greenland Election Results: Center-Right Opposition Wins Amid Trump Saber-Rattling - Politico
- Is The World Ready For Another Pandemic? - Context
- Brazil Will Not Retaliate Against US Steel Tariffs Immediately, Minister Says – Yahoo Finance
- China Warns Taiwan of Crossing 'Red Line' - Newsweek
- China Says It’s Willing To Cooperate With The U.S. On Fentanyl - CNBC
- China Is Mapping the Seabed to Unlock New Edge in Warfare – WSJ
Policy and Politics
Assembly And State Senate Release ‘One-House’ State Budget Proposals
The state Senate and Assembly released their one-house rebuttals to Gov. Kathy Hochul’s executive budget proposal, enabling official negotiations on this year’s state budget to begin in earnest. State Senate Majority Leader Andrea Stewart-Cousins, using her usual parlance, said they were at “the beginning of the middle.” Neither document made major, wholesale changes to the governor’s budget, but they did include some notable differences – particularly on discovery reform, involuntary commitment and Hochul’s rebate check proposal.
In what promises to be one of the major points of contention this year, both chambers removed Hochul’s proposed language that would change the state’s discovery law. In 2019, lawmakers approved significant changes to the discovery law – which governs how and when prosecutors need to turn over evidence to the defense – meant to ensure defendants have faster and fairer access to evidence that can be used to defend themselves. But prosecutors have complained that some provisions of the law are too onerous, and some penalties for mistakes too severe, and have pushed for rollbacks to the 2019 reforms. Hochul heeded their requests in her budget, including the tweaks that district attorneys asked for.
Senate Democrats Appear Ready To Vote to Avoid Government Shutdown
Senate Democrats say the six-month government funding resolution that passed the House Tuesday is a “horrible” bill, but there’s growing sentiment within the Senate Democratic conference that it would be too risky to block the legislation and risk a government shutdown that could drag on for weeks. Senate Democrats battled behind closed doors Tuesday over how to handle the House bill, with a number of Democrats — especially those in swing states — arguing that a government shutdown must be avoided, even if it means reluctantly voting for a House GOP-drafted bill.
Senate Democrats say the six-month government funding resolution that passed the House Tuesday is a “horrible” bill, but there’s growing sentiment within the Senate Democratic conference that it would be too risky to block the legislation and risk a government shutdown that could drag on for weeks. Senate Democrats battled behind closed doors Tuesday over how to handle the House bill, with a number of Democrats — especially those in swing states — arguing that a government shutdown must be avoided, even if it means reluctantly voting for a House GOP-drafted bill.
Immigration Accounts for Entire US Population Growth for First Time: Survey
or the first time since records began, immigration was the sole driver of the United States' population growth in a single year, a new study released Wednesday said. The nonpartisan Migration Policy Institute (MPI) looked at U.S. Census Bureau data for 2022-2023, the latest available, finding that falling American birthrates factored into the change. The U.S. immigrant population grew by 1.6 million between 2022 and 2023 to 47.8 million, according to the MPI analysis, with immigrants now representing a 14.3 percent share of the overall population — the highest ever.
In 2023, birth rates among American women reached a record low for those aged between 20 and 24, while the rate also dropped overall for the larger group of 20-39 year olds, according to the Centers for Disease Control and Prevention The findings come at a time when immigration, particularly illegal immigration, is a key focus of the current White House administration. While plans for mass deportations are being carried out, the other obstacle — a collapsing fertility rate — has been far more vexing for officials, both in the U.S. and other developed nations suffering from the same dynamic.
Trump’s First 100 Days
- Education Secretary: Mass Layoffs First Step Toward Total Shutdown – The Hill
- Faculty-on-Faculty War Erupts at Columbia as Trump Targets Elite School - WSJ
- EPA’s Zeldin Terminates $20B In Biden Climate Grants - Politico
- Reductions In Force: A Look At Which Agencies Are Affected By DOGE-Led Job Cuts – The Hill
- EPA Plans to Close All Environmental Justice Offices - NYT
- Democrats’ Path to Reclaiming the Senate Just Got Harder - WSJ
- Irish PM Visits White House Amid Divisions On Economy, Ukraine, Gaza - VOA
- 56 Percent Disapprove Of Trump Handling Of Economy: Survey – The Hill
- Will Trump Defend Taiwan? U.S. Defense Perimeter Appears To Shrink – Nikkei Asia
- Amid Trump Crackdown, Surge In Migrants In Mexico Seeking Help To Return Home - Reuters
- White House Rejects Bid To Release Palestinian Student Activist Amid Protests – France 24
- Arrested Columbia Student to Remain in Louisiana, Judge Orders - WSJ
- Trump Administration Halting $1B Affordable Housing Preservation Program – The Hill
Health and Wellness
Measles Outbreaks in the U.S. Highlight the Importance of Vaccination
A measles outbreak in the southwestern United States continues to grow as public health officials work to contain the spread and boost vaccination rates. At a time of rampant mis- and disinformation about vaccines, public health experts worry outbreaks like this may only become more common. The current outbreak began in late January, and as of February 25, Texas has confirmed 124 cases—the majority in Gaines County—and nine cases are confirmed in neighboring Lea County, New Mexico. A death reported on February 26 is the first death from measles in the U.S. since 2015.
“Most of the cases are occurring in a Mennonite community that largely homeschools, so there would not be school vaccine mandates,” explains Bill Moss, MD, MPH, a professor in Epidemiology and executive director of the International Vaccine Access Center. In this Q&A, he explains the key facts about measles, how it spreads, and why high vaccination rates are so important to keeping outbreaks from occurring.
Industry News
Gen Z's Economic Might: $1.1T Income And Growing Workforce
Generation Z’s economic influence is growing. The country’s youngest cohort, which accounts for one-quarter of the U.S. population, has reached an estimated combined income of $1.1 trillion, leaving them with about $950 billion to spend after taxes. That compares with a combined income, including earnings from jobs, parental support and side hustles, of $360 billion just three years ago, according to a study released by research, training and advisory firm Gen Z Planet.
That is largely driven by the expanding presence of Gen Z workers in the full-time workforce. There are now 18.1 million full-time Gen Z employees, the report said. Part-time work also makes up a significant portion of income for younger Americans, with more than 9 million Gen Z workers in part-time jobs earning almost $107 billion in net income. The rest of the story is that many Gen Zers are having difficulty achieving financial independence. Forty-two percent of Gen Z adults still live with their parents, compared with 38% of millenials, 32% of Gen X and 29% of Baby Boomers who lived with their parents as young adults.
Trump Metals Tariffs Draw Swift Retaliation From Canada And EU
President Donald Trump's increased tariffs on all U.S. steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the U.S. and drawing swift retaliation from Canada and Europe. Trump's action to bulk up protections for American steel and aluminum producers restores effective tariffs of 25% on all imports of the metals and extends the duties to hundreds of downstream products, from nuts and bolts to bulldozer blades and soda cans.
The European Commission, the executive arm of the European Union charged with coordinating trade matters, responded swiftly, saying it would impose counter tariffs on up to 26 billion euros ($28 billion) worth of U.S. goods - often with more symbolic than economic impact - from next month. The EU's own counter-measures - while impressively eclectic ranging from dental floss to diamonds and bathrobes to bourbon - only cover goods worth about six days' worth of trade in goods and services within the giant EU-U.S. commercial relationship. France's Europe Minister Benjamin Haddad warned, however, that the EU could expand its response.
One of the Biggest Victims of Trump’s Metals Tariffs: The Ford F-150
America’s most popular pickup truck might not be able to outrun President Trump’s new tariffs on steel and aluminum. The Ford F-150, the top-selling vehicle in the U.S. and the automaker’s main profit engine, is one of the industry’s biggest users of aluminum. The Trump administration reinstated early Wednesday a blanket 25% tariff on steel imports and boosted the levy on aluminum made outside the U.S.
The tariffs are the latest Trump administration trade barrier that threatens to inflate already-high car prices. Together, the metals account for more than half the materials that go into cars, and costs from the tariffs likely will get passed along to car buyers, analysts say. If left in place, they could on average inflate the costs to automakers of building a car by about $400 per vehicle, according to research from Barclays. The aluminum tax in particular presents a problem for automakers: They are using more of the lightweight metal in cars, but the U.S. has been producing less of it. Most of the high-quality aluminum used in vehicles’ outer bodies starts out as imported aluminum, and there are a dwindling number of domestic alternatives.
The EU Ban On Combustion Car Engines Is In Trouble
The EU's vision of ending sales of greenhouse-gas-emitting cars by 2035 is under fire. The idea was a key priority of the previous European Commission, which was dedicated to the fight against climate change. But war, a populist backlash, economic stagnation and a car industry hemorrhaging red ink are forcing Brussels to backtrack. Europe’s automakers scored a massive political win this week when Commission President Ursula von der Leyen gave in to their pleas for leniency on emission targets that went into force this year and for an earlier review of the 2035 legislation as part of her plan to rescue the troubled car industry.
While the original measure was approved in 2023 by all member countries (despite last-minute resistance from Germany), it's turned into a political punching bag. Over the last year, elections across the EU saw national governments, lobbyists and automakers pick up the call to weaken or reverse it. The European People’s Party — part of von der Leyen’s political family and the largest grouping in the European Parliament — promised to reverse the law. In Germany, angst over the auto sector’s decline helped fuel the winning campaign of Christian Democrat Friedrich Merz, whose party also has its sights set on undoing the legislation.
Thriving Amid Chaos: Defense Tech Poised To Scale
This Administration is disrupting the status quo. In Silicon Valley, the word disruption is so common that it epitomizes tech industry ethos. Defense tech, in particular, aspires to disrupt a defense industry of legacy players, deeply entrenched interests, and bureaucratic inefficiency. President Trump’s defense officials understand that our national security depends on the success of this disruption, which began long before President Trump’s current term and must continue beyond it.
In other words, while some Administration actions are creating chaos in the public markets, others are sustaining consistent tailwinds for defense tech which includes the advanced, and often commercial, technologies critical for national security such as AI, cyber, autonomy, and space.
ILA, Port Employers Sign Historic 6-Year Contract
The deal, which gives union members a 62% raise over the course of the contract and job protections linked to automation technology, is retroactive to Oct. 1, 2024, and runs through Sept. 30, 2030. The pact covers 24,000 employees in container handling at 14 ports from Texas to Massachusetts. ILA International President Harold Daggett, who served as the union’s chief negotiator, celebrated the deal as the best package ever secured for members. It also includes accelerated wage raises for new workers, ensures the return of full container royalty funds to the ILA and enhances the union’s national health care program.
USMX Executive Vice President and Chief Operating Officer Paul De Maria, who led the negotiations for the alliance, emphasized the agreement’s focus on creating modern and safe working conditions. He highlighted the importance of enhancing strong and efficient supply chains to ensure American companies can compete effectively in the global marketplace. The new contract received unanimous support from USMX membership, underlining the broad consensus achieved between labor and management.
Delta And United Airlines Say They Will Reduce Capacity
Delta Air Lines, which cut its first quarter guidance this week, said that it will reduce its summer capacity. United Air Lines, meanwhile, said it will retire 21 aircraft early. “We had a bias to fly whatever we could as we head into summer,” Delta President Glen Hauenstein said Tuesday at a JP Morgan investor conference. "We’ve tempered that down to fly what needs to be flown. “The schedules to the summer are overbuilt,” Hauenstein added. “Expect that to be reduced.” Hauenstein did not specify the extent of the capacity cuts. Delta’s summer schedule will be out March 22.
United Airlines CEO Scott Kirby, said his airline will also reduce capacity with the early retirement of 21 aircraft. The carrier will cut in markets where it has high government traffic and in Canadian markets, and it will slash redeye utilization flying. “From industry level, I expect you will see modest supply changes in the short term,” Kirby said. “By the time we get to August, every analyst will be writing about capacity cuts.” Kirby added that some of these capacity cuts will come in markets where they would have come anyway. “Where you see people cutting is the places they’ve lost money,” and where they are not the number one carrier, Kirby said. He noted that Chicago and Denver are places where United is number one.
Amazon, Google And Meta Support Tripling Nuclear Power By 2050
Amazon, Alphabet’s Google and Meta Platforms on Wednesday said they support efforts to at least triple nuclear energy worldwide by 2050. The tech companies signed a pledge first adopted in December 2023 by more than 20 countries, including the U.S., at the U.N. Climate Change Conference. Financial institutions including Bank of America, Goldman Sachs and Morgan Stanley backed the pledge last year. The pledge is nonbinding, but highlights the growing support for expanding nuclear power among leading industries, finance and governments.
Amazon, Google and Meta are increasingly important drivers of energy demand in the U.S. as they build out artificial intelligence centers. The tech sector is turning to nuclear power after concluding that renewables alone won’t provide enough reliable power for their energy needs. Amazon and Google announced investments last October to help launch small nuclear reactors, technology still under development that the industry hopes will reduce the cost and timelines that have plagued new reactor builds in the U.S. Meta issued a call in December for nuclear developers to submit proposals to help the tech company add up to four gigawatts of new nuclear in the U.S.