Member Briefing March 20, 2025
Fed Extends Pause on Rates, Cuts Outlook for Growth to 1.7%, Raises Inflation Forecast to 2.7%
The Federal Reserve extended its wait-and-see posture on interest rates while marking up its forecasts for inflation and revising down its outlook for growth this year. The central bank held steady its benchmark federal-funds rate at around 4.3% at its policy meeting. Fed officials say they expect GDP growth of 1.7% in 2025, down from their December projections of 2.1%. New economic projections showed 11 of 19 policymakers expect the Fed to cut rates at least twice this year, a narrower majority than the 15 officials who had penciled in at least two cuts in December.
Officials indicated they expected inflation to rise this year to 2.7%, up from 2.5% in January. The revision likely reflected increases on tariffs announced by President Trump and showed officials expect inflation to ultimately slow in 2026 and 2027. Officials marked up their forecasts of unemployment and lowered their forecasts for economic growth. In their policy statement, they said uncertainty around the economic outlook had increased. They removed language that had previously described the risks to achieving low and stable inflation with strong employment as “roughly in balance.”
CFO Survey: Most Companies Will Pass on Tariff Costs
The question of what companies will do with regard to new tariffs has been agonizing. However, 59% of CFOs have decided and expect their organizations to absorb less than 10% of tariff impact in their cost-base. This is according to a survey from Gartner. The survey also found that 41% expect to absorb on average 49% of tariff increase within their cost base. Gartner polled 192 CFOs and finance leaders from a cross-industry group of organizations with global operations about priorities in response to new tariffs.
“CFOs are exploring various strategies to minimize the short-term impact of tariffs, including revisiting Harmonized Tariff Schedule (HTS) classifications, leveraging tariff exemptions and free trade areas, and optimizing transactional structures to lower the dutiable value of imports,” said Alexander Bant, chief of research in the Gartner Finance practice. Additionally, CFOs are collaborating with supply chain leaders to update risk assessments, explore alternative sourcing strategies, and renegotiate supplier contracts. Reengineering the supply chain is a common theme, with 48% of CFOs working on alternative component and raw material sourcing and 41% reevaluating their supply chain network design.
Read more at Material Handling & Logistics
Big Retailers’ Hardball Tariff Playbook: Haggle, Diversify, Raise Prices
America’s biggest retailers are deploying every weapon they have to navigate President Trump’s fast-escalating trade war, from leaning on suppliers for discounts to finding alternate product sources. In some cases, that includes price increases for consumers. Much of the action so far has focused on goods from China, which the Trump administration hit with a 10% tariff in February and another 10% in March. Some suppliers say Walmart, Home Depot and other retailers are pushing a variation of the same demand: Make a price concession or shift production out of China. Otherwise, the suppliers risk losing some business.
The sometimes-tense deliberations among retailers and suppliers show how Trump’s trade agenda is already rippling through global supply chains, with billions of dollars of consumer spending at stake. “Companies are completely under the gun and panicking,” said Joe Jurken, founder of the ABC Group in Milwaukee, which helps U.S. businesses manage supply chains in Asia. He has received a flood of inquiries from manufacturers facing pressure from retailers to move production out of China, he said. Some of the requests have raised the ire of Chinese officials. Authorities in China summoned Walmart for a meeting in recent days after some suppliers complained the largest U.S. retailer by annual revenue was pressuring them to cut prices and absorb the tariff cost.
Global Headlines
Middle East
- Future Negotiations With Hamas 'Will Take Place Only Under Fire', Says Netanyahu – France 24
- Israel, Fighting Again in Gaza, Is Also at War at Home - WSJ
- U.S. Strikes Hit Targets In Yemeni Capital, Houthi-Run TV Reports - Reuters
- US Strikes Houthi Strongholds In Yemen Where Leaders Are Hiding, Yemeni Sources Say - Reuters
- Israel Retakes Netzarim Corridor, Again Splitting Gaza In Half - Fox
- Israeli Forces Expand ‘Targeted Ground Activities’ in Gaza Strip - NYT
- Israeli Strikes Kill 970 In Two Days In Gaza, Including UN Staffer – France 24
- 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 and Russia Accuse Each Other of Violating Partial Truce – WSJ
- Zelenskyy Says He Has Call With Trump After White House’s Failed Bid To Halt Putin - Politico
- Trump Says Ukraine-Russia Talks Are ‘On Track’ After Call With Zelenskyy - CNBC
- German Defense Minister Slams Trump-Putin Partial Ceasefire Deal - Politico
- US Suspends Some Efforts To Counter Russian Sabotage As Trump Moves Closer To Putin - Reuters
- Chris Coons On Trump-Putin Call: ‘Russia Remains The Obstacle To Peace’ – The Hill
- 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
- Turkey Detains Erdogan’s Top Rival in Dawn Raid on Opposition - WSJ
- After The North Sea Tanker Crash, A Multi-Million Dollar Battle Over Who’s To Blame - Politico
- China Unveils Rule To Counter ‘Discriminatory’ Measures In International IP Disputes - SCMP
- War-Torn Congo Has a Deal for Trump: Kick Out Rebels, Get Minerals - WSJ
- French MEP Demands The US 'Give Us Back The Statue Of Liberty' – France 24
- China Holds Drills Near Taiwan After Lai's 'Foreign Hostile Force' Remark – Nikkei Asia
- Five Charged In European Parliament Huawei Bribery Probe - Reuters
- Ben & Jerry's Alleges Parent Company Unilever Removed Its CEO Over Social Activism – Yahoo Finance
- With 'Make In India' Policy, New Delhi Seeks To Produce And Sell Its Own Weapons – France 24
- Pope Francis No Longer Using Ventilation, Confirmed As Improving, Vatican Says – Reuters
Policy and Politics
Bessent: US to Produce Tariff 'Number' for Countries on April 2
President Donald Trump has promised reciprocal duties -- on both U.S. allies and competitors alike -- from April 2, though his administration has yet to release the exact details of the plan. "What's going to happen on April 2 -- each country will receive a number that we believe represents their tariffs," Bessent told Fox Business. "We are going to go to them and say, look, here's where we think the tariff levels are, non-tariff barriers, currency manipulation, unfair funding, labor suppression" he added. The Treasury Secretary left open the door to some avoiding reciprocal tariffs on that date. If countries stop their practices, Bessent said, "we will not put up the tariff wall." Some duties "may not have to go on because a deal is pre-negotiated," he said, or because countries swiftly approach Washington for talks once they receive their number.
Bessent saw "no reason we need to have a recession," saying "the underlying economy is healthy." He dismissed the premise of guaranteeing there will not be a downturn in the world's biggest economy. The former hedge fund manager raised the idea of a "pause" as the economy transitions away from "unsustainable" levels of government spending, pledging that the Trump administration would rein in expenditures and bring manufacturing home.
Congress Sets Pentagon Research, Development, Test And Evaluation Spending At $141B
Defense Department officials finally know how much money they’ll receive for research, development, test and evaluation this fiscal year after lawmakers passed legislation that will fund federal agencies through the end of September. RDT&E money helps fund next-generation capabilities for the U.S. military in many critical technology areas such as trusted AI and autonomy; space; integrated sensing and cyber; integrated network systems of systems; renewable energy generation and storage; microelectronics; human-machine interfaces; advanced materials; directed energy; advanced computing and software; hypersonics; biotech; quantum; and wireless tech (FutureG), among others.
The Army’s share of the RDT&E funding is approximately $14.3 billion, the Navy’s $26 billion, the Air Force’s $46.8 billion and the Space Force’s $18.6 billion. Defensewide RDT&E accounts will get $35.2 billion, and nearly $350 million will go toward operational test and evaluation, according to the legislation. The Pentagon’s RDT&E funding is about 15 percent of the $892.5 billion topline for national defense that Congress just approved for fiscal 2025.
Hochul And Trump Talk Congestion Pricing, Energy
Gov. Kathy Hochul on Tuesday offered a few details about her most recent one-on-one conversation with President Donald Trump. Hochul said she again hammered home the importance of keeping congestion pricing. Hochul traveled to Washington, D.C. on Friday for a meeting with Trump at the White House. Trump himself previewed what he wanted to talk about, with a focus on the long-stalled Constitution Pipeline in New York that would increase the supply of natural gas to New York and other northeast states. Officials in New York have blocked the project for years, and environmental activists heavily oppose it moving forward.
Although she didn’t offer any hints about the pipeline or whether she may be considering a deal to move that project ahead in exchange for the administration backing off on its opposition to congestion pricing, Hochul did say she talked with Trump about other energy issues. “I talked about my desire to have the offshore wind industry back online on Long Island.” The Trump administration has halted federal leasing for new offshore wind projects, imperiling the state’s clean energy goals that it's already lagging on. Hochul said that she also spoke with the president about nuclear energy – particularly small modular reactors – hydropower and onshore wind . On nuclear, she specifically asked for Trump’s help with streamlining approval of the federal Energy Regulatory Commission.
Trump’s First 100 Days
- Trump Fires Both Democrats on the Federal Trade Commission - NBC
- Hochul Will Defy Trump Deadline To Stop NYC Congestion Pricing – NY Post
- Oil Execs Meet With Trump as US Unwinds Environmental Rules – Yahoo Finance
- Tesla Attacks Surge Across US In Backlash Over Musk's White House Role – France 24
- Bondi Labels Tesla Vandalism ‘Domestic Terrorism’ – The Hill
- New York Dems Rally Behind Schumer – NY State Of Politics
- Trump Releases JFK Assassination Files - WSJ
- Asian American Groups Condemn Bill To Block Chinese From Studying In U.S. – Nikkei Asia
- AFT Sues Trump Administration For Shutting Down Student Loan Repayment Plans - CNBC
- Wisconsin's $59 Million Election Is Referendum On Trump And Musk - Newsweek
- New York Judge Orders Mahmoud Khalil’s Case Be Moved to New Jersey - WSJ
- Trump Administration Chastises Judge For Making Deportation Flight Case ‘A Picayune Dispute’ – The Hill
- GOP Lawmakers Conflicted Over Trump’s Clash With Judiciary – The Hill
- The Trump Tracker, Stay Up To Date on the First 100 Days – WSJ
Health and Wellness
Can A Mask Detect Respiratory Health?
It is generally accepted that your wearable can help you with health concerns. And there have been instances of a smart watch alerting a wearer to an abnormal heart beat that lead to life-saving procedures. Well now professor of medical engineering at Caltech, Wei Gao, has developed a prototype for a smart mask that can monitor respiratory health. It can check for a range of conditions including asthma and COPD (chronic obstructive pulmonary disease), and post-COVID-19 infections. It does this by monitoring physical changes such as temperature, humidity, or rate of breathing.
To test the masks, the breath of patients with asthma or COPD were monitored for nitrite, a biomarker for inflammation in both conditions. The results showed that the masks accurately detected the biomarker, indicting inflammation in the patients' airways. "These first studies are a proof of concept," says Gao,in an article. "We want to expand this technology to incorporate different markers related to various health conditions. This is a foundation for creating a mask that functions as a versatile general health–monitoring platform."
Industry News
Egg Prices Plummet to Nearly Five-Month Low
Egg prices in the U.S. have fallen to $3.45 per dozen, reaching their lowest level in nearly five months, following a period of price volatility fueled by supply chain issues, bird flu outbreaks, and fluctuating consumer demand. Egg prices became a key issue in discussions about inflation during the 2024 presidential election, as grocery costs remained a concern for American households. President Donald Trump frequently criticized rising food prices on the campaign trail, linking them to broader economic policies.
Egg prices have experienced extreme fluctuations over the past year. On March 3, wholesale egg prices reached a record $8.17 per dozen, according to data from the U.S. Department of Agriculture (USDA). The spike was attributed to tight supplies and seasonal demand. Since then, prices have declined more than 57 percent to $3.45 per dozen, the lowest since late October 2024. A recent USDA Egg Market Report noted that egg inventories have increased, contributing to the drop in prices. The report also found that demand has eased slightly following the holiday season, reducing upward pressure on costs, and that there had been "no significant" outbreaks of bird flu reported so far in March.
Auto Suppliers Face More Dire Circumstances Than Automakers Amid Trump Tariffs
President Donald Trump’s proposed tariffs on goods from Mexico and Canada would hit automotive suppliers harder than automakers, but their problems could quickly have ripple effects on the broader industry. Most vehicles produced in North America meet the requirements for tree trade under the United States-Mexico-Canada Agreement, but far fewer individual parts meet the stringent standards under the 2020 North American trade deal that was negotiated by Trump, according to federal trade reporting data.
Roughly 63% of motor vehicle parts imported from Mexico into the United States in 2024 were complaint with USMCA standards. That compares with 92.1% of motor vehicles. For Canada, 74.6% of motor vehicle parts and 96.9% of vehicles were imported tariff-free under USMCA in 2024. That includes 170 Canadian parts suppliers that operate facilities in 26 states, according to the Automotive Parts Manufacturers’ Association in Canada. To be USMCA compliant, 75% of vehicle content must be sourced from the U.S., Canada or Mexico, with additional requirements, such as that 40% of core parts and 70% of steel and aluminum must be sourced regionally.
China EV Maker BYD Says New Cars Can Be Charged In 5 Minutes
Chinese electric vehicle maker BYD says its new cars can be charged in almost the same time it takes to refill a gas engine vehicle at the pump, giving the world's top EV seller a major advantage in a highly competitive market. BYD's new 1 megawatt flash chargers can power vehicles in five to eight minutes, according to the company, which plans to build 4,000 new charging stations across China.
Long charge times and so-called range anxiety around limited access to charging stations are often what holds motorists back from making the switch to electric cars. BYD says its new chargers can power vehicles for about 250 miles in five minutes. "To completely solve users' anxiety over charging, our pursuit is to make the charging time for EVs as short as the refueling time for fuel vehicles," BYD founder Wang Chuanfu said in a statement. BYD, short for Build Your Dreams, has started pre-selling its new range of vehicles, called Han L and Tang L.
Siemens Cutting 6,000 ‘Digital Industries’ Positions
Siemens AG is cutting roughly 6,000 positions company-wide, mainly in its Digital Industries business unit that develops and manufactures industrial automation hardware and software, and offers digitalization technology and services. CEO Roland Busch anticipated 5,000 job cuts late last year when Siemens reported a -46% drop in revenue for that operating unit. Now, Siemens has put the number of redundancies for Digital Industries at 5,600, or 8 percent of the total employment for that segment.
The entire engineering group has 312,000 employees total across all of its business, but the industrial automation business has been hampered by prolonged weak demand, especially in Germany and China. "The German market in particular has been in decline for two years. Capacities in Germany must therefore be adjusted," according to a group statement. Siemens also will cut 450 jobs from its electric vehicles charging business, or about one-third of the total employed in that unit. That business, Siemens eMobility develops and supplies EV charging infrastructure (AC and DC chargers), charging software, and services
Read more at American Machinist
Defense Supply Chains Need Help, House Panel On China Told
Officials from major companies in Alabama’s Huntsville defense industry warned members of a U.S. House committee Monday that policies on procurement, budgeting and supply chains need rapid overhauls as competition with China heats up. Leaders from companies including RTX Corp., Boeing Co., Lockheed Martin Corp., and Northrop Grumman Co. spoke with members of the House Select Committee on China, along with Alabama Reps. Dale Strong and Robert Aderholt, at a roundtable in Cummings Research Park on Huntsville’s role in national and missile defense.
Time and again, elected officials were told industry craves certainty: in funding; in priorities; and in programs. Raymond Sharp, vice president for missile defense solutions with Northrop Grumman, said the smaller players in the supply base –even more than the big defense primes with seats around the conference table – need assurances that budgets will be passed, and programs will stay funded. “It’s not just the double-digit billion-revenue companies, we’re talking about some of the smaller ones you see here in Huntsville where you’re looking at $1 million or $2 million in annual revenue,” he said. “Asking them to invest with uncertainty is tough.”
Nvidia CEO Jensen Huang Says We'll Soon See 1 Million GPU Data Centers Visible From Space
Nvidia CEO Jensen Huang has big plans for the AI data center industry. During the company’s GTC conference, the chip giant’s executive and co-founder debuted Nvidia’s Spectrum-X and Quantum-X silicon photonics networking systems. Networking switches connect multiple Nvidia graphics chips together to act as one giant system. Huang says Spectrum-X and Quantum-X photonics can join hundreds and even thousands of GPUs and will enable data center companies to deploy up to 1 million GPU clusters.
That’s a massive jump from the current largest AI supercomputer, xAI’s Colossus, which is made up of 100,000 Nvidia Hopper GPUs. And according to Huang, those million cluster data centers will be connected to other million-dollar data centers nearby to form massive data center facilities. “AI factories are directly related to revenue, and if the throughput is not good, your revenue is hurt. If you don't have enough capacity, your revenue is hurt. If you're not producing something of great value ... your revenue is hurt,” Huang said. “It's a factory. Except it's a factory of tokens. It's a new world. An industrial revolution.”
Palisades Nuclear Plant Owner Gets $56.8 Million From Feds Toward Restart
he U.S. Department of Energy said it disbursed about $56.8 million to Holtec International on Monday as the company continues work in west Michigan toward the country's first-ever restart of a commercial nuclear power plant. The funds represent the second tranche of federal loan dollars released for Holtec's project at the Palisades Nuclear Plant in Covert Township. The maximum loan for the project is $1.52 billion, per a September 2024 agreement between the DOE and Holtec.
Holtec has not yet received full reauthorization to resume power operations at the Palisades plant, but the company has cleared regulatory hurdles so far. Most recently, the NRC published a draft environmental assessment in January that included a provisional finding of no significant impact, or FONSI. The commission is reviewing public comments on the draft. If the FONSI holds, that will eliminate the need for a more cumbersome Environmental Impact Statement from the federal regulator. "We remain confident in our trajectory toward a timely plant restart by the end of this year, pending all necessary federal regulatory reviews and approvals,” said Holtec International President Kelly Trice in a February statement.
Boeing CFO Gives Upbeat Outlook, Says Cash Burn Is Easing
Boeing’s cash burn is easing this quarter and its factories are improving to deliver more planes this year, the aerospace giant’s finance chief said Wednesday, as the company works to turn a corner on several manufacturing and safety crises. “We think we’re off to a good start for the year,” West said at a Bank of America investor conference. He said cash burn improvement could be in the “hundreds of millions” of dollars.
Boeing burned through about $14 billion last year, including more than $4 billion in the last three months of 2024, when it struggled through a nearly two-month labor strike at its largest factories and faced other production problems. Boeing last posted an annual profit in 2018. West said the massive fire at a Pennsylvania fastener factory in February won’t have a near-term production impact or affect Boeing’s goal to get to a production rate of 38 737 Max aircraft a month or seven 787s because of its elevated inventory. West also brushed off immediate concerns about President Donald Trump’s proposed tariffs, but said any impact depends on how long the uncertainty lasts.
Estée Lauder Earnings Disappoint – How The Cosmetics Company Lost Its Way
Cosmetics giant Estee Lauder is in the process of a multiyear turnaround plan that’s expected to cost between $1.2 billion and $1.6 billion. “Simply said, we lost our agility,” CEO Stéphane de la Faverie said in a post-earnings call for Estée Lauder’s fiscal year 2025 second quarter. “We did not capitalize on the higher growth opportunities quickly enough in channels, markets, media and prestige price tiers, nor fuel new consumer acquisition aggressively enough,” he said, adding that the company also hasn’t innovated enough, which often put it “behind trend.” The beauty firm, which also owns brands Clinique, MAC and Jo Malone, posted second-quarter results that showed revenues dropped 6% to $4 billion from $4.3 billion in the same period last year. Sales in skincare, its largest category by far, were down 12%.
De la Faverie became the company’s first new CEO in more than 15 years in January and was tapped to lead a turnaround. He introduced a bold action plan in February called “Beauty Reimagined,” which aims to “restore the company’s sustainable sales growth,” per the company’s website. Part of the plan includes some major cost-cutting initiatives; de la Faverie expanded a “restructuring plan” that will cut up to 7,000 jobs, or 11% of Estée Lauder’s 62,000-person workforce, and even affects the C-suite.