Member Briefing May 21, 2025
NY Fed: Service Sector Business Activity Fell Substantially For A Third Consecutive Month In The Region
Business activity continued to decline in the region’s service sector in May, according to firms responding to the Federal Reserve Bank of New York’s Business Leaders Survey. The survey’s headline business activity index was little changed at -16.2. The business climate index remained firmly negative at -51.7, suggesting the business climate continued to be considerably worse than normal. Employment held steady, and wage growth slowed. Supply availability worsened significantly. Input price increases remained moderate, while selling price increases slowed somewhat. Firms were again quite negative about the outlook, with nearly half expecting activity to decline in the months ahead.
- The employment index was little changed at -0.5, indicating that employment levels were steady. The wages index moved down seven points to 28.3, indicating that wage growth slowed.
- The prices paid index remained elevated at 58.5, while the prices received index slipped five points to 20.7, pointing to some slowing in selling price increases.
- The index for future business activity remained firmly negative at -28.1, holding at its lowest level since April 2020.
- The index for the future business climate stayed staunchly negative at -45.9, suggesting the business climate is expected to continue to be considerably worse than normal.
- The future employment index held below zero.
- Capital spending plans remained negative.
Trump: Golden Dome To Cost $175 Billion, Will Be Led By Space Force’s Guetlein
President Donald Trump today announced that his signature Golden Dome effort will cost $175 billion, and that he has tapped the Space Force’s Vice Chief of Space Operations, Gen. Michael Guetlein, to lead the project. The Golden Dome project will be “fully operational” by the end of his term, Trump asserted, laying out a challenging timeline for the sprawling, highly complex initiative. Canada has also asked to join the effort, according to Trump.
The Golden Dome effort, which takes its name from Israel’s Iron Dome air defense system, was created by an executive order days after Trump took office in January. Like the dome in the name suggests, the initiative aims to create a veritable air defense shield around the American homeland to defend against a variety of threats, such as cruise and ballistic missiles and next-generation weapons like hypersonics. Golden Dome will be a “system of systems” with several “layers,” first consisting of sensors ranging from the ground and up to satellites. Data from those sensors would then feed an arsenal of interceptors to knock down an inbound threat. Under the plan, that would involve terrestrial interceptors but also at least a number of space-based platforms meant to destroy missiles shortly after they get off the ground, while they’re still in a stage of flight known as the boost phase.
Migrant Labor Force Withstands Mass-Deportation Push
President Trump’s mass-deportation push has instilled widespread fear among migrants. What it hasn’t done, so far, is stop many from showing up for work. While data covering immigrants lacking permanent legal status is fragmentary, what is available shows no broad pullback from the labor force. In the three months since Trump took office, employment has continued to grow. That includes many industries reliant on workers lacking legal status: construction; the category that includes janitorial and landscaping services; food-manufacturing and restaurants; and staffing firms.
As of April, there were 31.8 million foreign-born workers with jobs, up 0.1% from January and 4.4% from a year earlier, according to a monthly Census Bureau survey of households. The data doesn’t distinguish between workers in the U.S. legally and those without legal status. Many workers without legal status say they have to keep working out of economic necessity. Some have lived in the U.S. for years or even decades and have families, homes and cars to pay for. The certainty of falling behind on bills often outweighs the unquantifiable risk of being detained by federal authorities, some migrants say.
Global Headlines
Middle East
- Iran's Khamenei Slams 'Outrageous' US Demands In Nuclear Talks – Reuters
- Iran's Collapsing Economy Caught in Trump's Crosshairs - Newsweek
- Netanyahu Says Israel Will Take Over Gaza as It Allows Food to Trickle Into Enclave - WSJ
- Israel Lets Aid Into Gaza After 11-Week Blockade But UN Calls It 'Drop In Ocean' - BBC
- Israel’s Allies Denounce Its New Gaza Offensive - NYT
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Zelensky Accuses Russia Of 'Buying Time' To Stall Truce Talks – BBC
- EU, Britain Go Ahead With New Russia Sanctions Without Waiting For Trump – Reuters
- Zelensky’s Attempt to Get Trump on His Side Falls Flat - WSJ
- IMF Begins New Review Of War-Torn Ukraine's $15.5 Billion Loan - Reuters
- Russia Classifies Population Data as Birth Rates Plunge to 200-Year Low - Newsweek
- 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
- Race For Poland’s Presidency Blows Wide Open – Politico
- Turkey's Erdogan Has Become One of World's Most Powerful Men—And Trump Ally - Newsweek
- Jurassic Snark: New Zealand Dinosaur Sculpture Fuels Debate - BBC
- Expert Sounds Alarm on $170 Billion European Defense Plan - Newsweek
- Election Analysis Reveals Right-Wing Surge Across Europe - Politico
- Portugal’s Election Brings Another Minority Government And A Far-Right Rise – The Hill
- With US And EU Deals, Britain Embarks On High-Risk Balancing Act – Reuters
- Cannes 2025: New Fashion Rules, Movies In The Spotlight, Trump's Tariffs - NPR
Policy and Politics
Siena Poll Shows That Most Voters Would Prefer Someone Other Than Kathy Hochul For Governor
Governor Kathy Hochul’s favorability and job approval ratings were little moved in the last month, according to a new Poll of registered voters. Hochul’s favorability rating is 44-46%, from 44-43% in April. Voters approve of the job Hochul is doing as Governor, 50-46%, from 48-45% last month. Now, 36% of voters are prepared to re-elect Hochul, compared to 55% who want ‘someone else,’ a net 10-point negative movement from 39-48% in April.
Looking ahead a year, 46% of Democrats say they would support Hochul in a gubernatorial primary, compared to 12% for Antonio Delgado and 10% for Rep. Ritchie Torres, little changed from last month. And 35% of Republicans say they would vote for Rep. Elise Stefanik in a gubernatorial primary, compared to 22% for Rep. Mike Lawler and 11% for Nassau County Executive Bruce Blakeman. Last month, prior to including Stefanik, Blakeman led Lawler 28-22%.
Read more at The Siena College Research Institute
More From the Siena Poll…
Three NYS budget measures enjoy overwhelming bipartisan support. Making it easier for consumers to cancel subscriptions has support from more than three-quarters of Democrats, Republicans and independents. Providing free meals to all public-school students is supported by nearly two-thirds of Republicans, nearly three-quarters of independents and more than nine in ten Democrats. And restricting K-12 students’ smartphone use during the school day has the support of 66% of Democrats, 67% of independents and 68% of Republicans.
- President Donald Trump’s favorability rating is 38-59%, down from 40-55% in April. His overall job approval rating, 40-57%, is down a little from 42-56% last month.
- While a plurality of voters continues to believe that New York should support the federal government’s efforts to deport illegal migrants living illegally in New York, 45-38%, down from 48-31% in February, and 54-35% last December.
- Senator Chuck Schumer’s favorability rating, 42-48%, improved slightly from his all time worst favorability rating last month, 39-49%. Among Democrats, his net favorability rating rose from +14 points to +23 points.
- Voters continue to be closely divided on the direction of the state with 43% saying New York is on the right track and 46% saying the state is headed in the wrong direction, compared to 41-45% last month. When it comes to the direction of the country, only 37% say it’s on the right track, while a majority, 58%, say it’s headed in the wrong direction, little changed from 37-56% last month.
- The State Assembly has a 41-35% favorability rating, little changed from 43-35% in April. The State Senate has a 42-37% favorability rating, little changed from 45-37% last month.
Read more at The Siena College Research Institute
Here’s What’s In The GOP’s 1,116-Page ‘Big, Beautiful Bill’
The House Budget Committee advanced the mammoth, 1,116-page bill in an unusual late-night vote on Sunday, as Republicans of various factions have clashed over the size and scope of the plan. Republicans are expected to make further changes in the coming days. A centerpiece of the legislation is making the 2017 Trump tax cuts permanent — which nonpartisan scorers and think tanks estimate would cost trillions of dollars over the next decade. The legislation also includes significant cuts to Biden-era tax credits for climate-friendly energy sources — though amid pressure from conservatives, it could go even further. The bill’s initial text eliminates tax credits for electric vehicles within two years.
Here’s a rundown of what else is in the bill.
Political Headlines
- Donald Trump's Approval Rating Surges In Polls - Newsweek
- President Trump Signs Take It Down Act, Addressing Nonconsensual Deepfakes – AP
- Trump Headed To Capitol To Try To Mend US House Republican Rifts On Tax Bill - Reuters
- Joe Biden Had Unrivaled Medical Care. How Did His Cancer Go Undetected? - WSJ
- Trump Pushes SALT Republicans to Abandon Further Cap Hike – Yahoo Finance
- DOJ Charges Democratic Congresswoman Over Newark ICE Facility Incident – The Hill
- Trump’s Small Business Administration Is Tightening Loan Requirements - Forbes
- Homeland Security Says 64 People 'Self-Deported' On US Flight - BBC
- Qatar’s Prime Minister Defends Jet Gift Offer To Trump—Says It’s A ‘Normal Thing Between Allies’ - Forbes
- Schumer Introducing Bill Banning Foreign Planes As Air Force One After Qatar Reportedly Offers Jet To Trump - Forbes
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
FDA Outlines Stricter Covid Vaccine Booster Approval Standards For Healthy People
The Food and Drug Administration on Tuesday outlined new regulatory guidance for future Covid-19 vaccine boosters, setting stricter approval standards for healthy Americans. The agency wants to see new clinical trials showing Covid shots are still safe and effective before approving them for healthy adults and children, a costly new requirement for pharmaceutical companies that could limit who gets new jabs each year. Previously, the FDA typically approved updated Covid shots for all Americans each year based on simple tests that show they trigger a strong enough antibody response.
For adults 65 and older, and for people as young as 6 months who have certain underlying health conditions, the FDA said it will accept immunogenicity data – which shows a vaccine generates a strong immune response – as enough to determine that a shot’s benefits outweigh its risks. The FDA estimates that 100 to 200 million Americans have conditions that put them at high risk of severe illness, including obesity and mental health conditions like depression. But for healthy people between 6 months and 64 years old who don’t have risk factors, the agency plans to require stronger evidence for vaccines from randomized, controlled trials. These studies must show actual clinical outcomes, such as fewer infections or hospitalizations, before the FDA grants full approval of a shot.
Industry News
Trade War Updates
- Guinness Distributor Warns Tariffs Could Cut Profits By $150 Million – Forbes
- China IPhone Exports To US Plunge To 14-Year Low Amid Tariff Tensions – Yahoo Finance
- EU Highlights Potential For Cooperation In Energy, Telecoms, Steel, Semiconductors And Cars - Politico
- How Critical Minerals Became Beijing’s Ultimate Trump Card In US-China Trade War - SCMP
- Home Depot Plans to Keep Prices Steady Despite Tariffs - WSJ
- Taiwan’s President Downplays Tariff Tensions With The US As ‘Frictions Between Friends’ - AP
- First Cracks Emerge in US-China Trade Truce - Newsweek
- As The Trade War Drags On, Canadians Avoid U.S. Products — And Travel - Marketplace
- Japan Is Sticking To Demand For US To Eliminate Tariffs, Trade Envoy Says – Yahoo
China Cuts Key Rates To Aid Economy As Trade War Simmers
China cut benchmark lending rates for the first time since October on Tuesday, while major state banks lowered deposit rates as authorities work to ease monetary policy to help buffer the economy from the impact of the Sino-U.S. trade war. The widely expected rate cuts are aimed at stimulating consumption and loan growth as the world's No. 2 economy softens, while still protecting commercial lenders' shrinking profit margins.
The rate cuts are part of a package of measures announced by PBOC Governor Pan Gongsheng and other financial regulators before talks between China and the U.S. in Geneva earlier this month that led to a de-escalation in their trade war. Tuesday's rate cuts were a pre-emptive move, said Xing Zhaopeng, senior China strategist at ANZ. “One purpose is to repair commercial banks' net interest margin and get prepared for the future," Xing said, expecting one more rate cut by the end of July. Nicholas Zhu, an analyst at Moody's, expects a prolonged period of low interest rates in China.
Feds Allow New York Offshore Wind Project After Apparent Gas Pipeline Compromise With State
Norwegian energy company Equinor will resume construction on its offshore wind farm in New York, after the Trump administration lifted its order to halt work on the project. Empire Wind 1 will be the first offshore wind project to deliver electricity directly to New York City. The Interior Department under the Biden administration approved the project last year after Equinor signed a lease issued by the department in 2017. But Interior Secretary Doug Burgum ordered construction on Empire Wind to stop on April 16. New York Gov. Kathy Hochul said Monday evening that Burgum and President Donald Trump agreed to lift the stop-work order and allow the project to move forward “after countless conversations with Equinor and White House officials.” Empire Wind supports 1,500 union jobs, Hochul said.
Burgum said he was encouraged by Hochul’s “willingness to move forward on critical pipeline capacity.” “Americans who live in New York and New England would see significant economic benefits and lower utility costs from increased access to reliable, affordable, clean American natural gas,” the Interior secretary said in a post on social media platform X. Hochul did not mention natural gas in her statement, though she “reaffirmed that New York will work with the Administration and private entities on new energy projects that meet the legal requirements” under state law. New York has a history of opposing new natural gas pipelines.
Honda Walks Back EV Investment, Sales Targets on Poor Demand
Honda Motor said on Tuesday that it was scaling back its investment in electric vehicles given slowing demand and would be focusing on hybrids, now far more in favour, with a slew of revamped models. Japan's second-biggest automaker after Toyota Motor also dropped a target for EV sales to account for 30% of its sales by the 2030 financial year. Honda has slashed its planned investment in electrification and software by that year by 30% to 7 trillion yen ($48.4 billion). It's one of a number of global car brands dialling back EV investment due to the shift in demand in favour of hybrids and as governments around the world ease timelines to meet emission rules and EV sales targets.
Honda plans to launch 13 next-generation hybrid models globally in the four years from 2027. At the moment it has sells more than a dozen hybrid models worldwide, though just three in the U.S. - the Civic, which comes in hatchback and sedan versions, the Accord and the CR-V. It will also develop a hybrid system for large-size models that it plans to launch in the second half of the decade. The automaker is aiming to sell 2.2 million to 2.3 million hybrid vehicles by 2030, a huge jump from 868,000 sold last year. That also compares with a total of 3.8 million vehicles sold overall last year.
Nvidia Opens Up Its Platform, Plans AI Supercomputer in Taiwan
Nvidia is planning to build Taiwan’s first AI supercomputer while deepening partnerships with local heavyweights Foxconn 2317 0.00%increase; green up pointing triangle and TSMC, as tariffs test global supply chains. Nvidia said it will develop the AI supercomputer with Foxconn Technology Group and the Taiwan government to support researchers and enterprises. Foxconn, the world’s largest contract electronics manufacturer, will provide the AI infrastructure, while Taiwan Semiconductor Manufacturing Co. researchers plan to use the system to advance research and development.
Nvidia also expanded partnerships with system manufacturers in Taiwan, including Acer and Asus, with which it will build new high-performance desktop supercomputers. In his keynote address at Computex, Nvidia Chief Executive Jensen Huang said the company is planning a new hub in Taiwan, calling it an ideal nexus for AI advancement. The AI giant’s push in Taiwan come as the industry weighs developments around U.S. tariffs that threaten supply chains.
Emirates Global Aluminium Unveils USA $4 Billion Aluminium Smelter Plans
Emirates Global Aluminium (EGA) has unveiled plans to construct a $4 billion aluminium facility in the USA. The plant in Oklahoma is expected to have a production capacity of 600 thousand tonnes of primary aluminium per year. This would nearly double the United States’ production of an essential material for modern life and for national security. The Oklahoma location is subject to the finalisation of a competitive long-term power supply for the plant and state and local investment incentives and tax credit arrangements.
Some 85% of the aluminium needs of American industries, from automotive to aviation and construction, are currently met by imports. Construction of the facility is expected to begin after a feasibility study and by the end of 2026, with first hot metal by the end of the decade. It will be the first new primary aluminium production plant in the US since 1980.
New Pill Could Rival Ozempic and Wegovy—Will It Make Weight Loss Drugs More Accessible?
A daily pill from Eli Lilly could be as effective for weight loss and blood sugar control as injections like Ozempic or Wegovy, according to April data from a Phase 3 clinical trial. The glucagon-like peptide-1 (GLP-1) oral medication, called orforglipron, would allow people to reap the benefits from these blockbuster weight loss drugs without injections. However, experts say it’s not yet clear whether orforglipron or other oral GLP-1 medications would actually make these drugs less expensive. In Eli Lilly’s most recent Phase 3 clinical trial, patients who took the highest dose of orforglipron (36 milligrams) for 40 weeks lost an average of 16 pounds. That amounts to about 8% of their body weight. They also saw lower blood glucose levels. Participants’ A1C levels dropped by 1.3–1.6%.
Though it joins a crowded landscape of GLP-1 drugs, orforglipron is distinct from other options. Unlike Wegovy, Ozempic, Mounjaro, Victoza, and other popular GLP-1s, orforglipron is a daily pill, not an injection. Orforglipron is also structurally different from Rybelsus, the only currently available GLP-1 pill approved by the Food and Drug Administration (FDA). Eli Lilly plans to submit its orforglipron data for approval for weight management by the end of 2025.
3M Reached $450M Settlement With New Jersey Over Alleged PFAS Contamination
3M announced last week that it reached a proposed agreement with the New Jersey Department of Environmental Protection to pay up to $450 million to resolve all legacy PFAS-related claims in the state. The deal includes an approximately $210 million commitment to settle litigation relating to The Chemours Co.’s Chambers Works site in Deepwater, New Jersey, alleging 3M supplied PFAS to one of the facilities, according to court documents.
The settlement also includes 3M’s pledge to pay approximately $75 million to resolve current and future statewide claims from 2030 to 2050, according to the press release. 3M is the second chemical manufacturer with which New Jersey has settled litigation. In 2023, the U.S. subsidiary of Brussels-based chemical company Solvay S.A. reached a $392.7 million settlement regarding PFAS contamination claims in the state. 3M settled with the state a week before it was set to go to trial, alongside DuPont and Chemours. The first phase of the court trial involving Chemours and DuPont began on Monday, according to the court documents.
Read more at Manufacturing Dive
A Broken Thruster Jeopardized Voyager 1, But Engineers Executed A Remote Fix
Earlier this year, NASA mission controllers faced a challenging decision that could have marked the end of Voyager 1's decades-long journey. Launched in 1977 to explore the outer solar system, the spacecraft Voyager 1, along with its twin Voyager 2, depends on a powerful ground-based radio antenna for communication. This antenna needed to be taken offline for upgrades, but there was a real risk that when it was turned back on, contact with Voyager 1 might be lost forever.
The main concern revolved around the spacecraft's roll thrusters, which ensure its antenna remains pointed at Earth. Since 2004, Voyager 1 has been using its backup thrusters after the primary system failed. But the backup system was showing signs that it, too, might fail. A buildup of residue in a fuel line threatened to eventually stop them from working. The Voyager team suspected that the heaters on the primary thrusters had turned themselves off because of an electronics glitch. But there was also a chance that if they tried to switch them back on and fire up the primary thrusters, the spacecraft could explode. But on March 20, the Voyager team received encouraging news: the test of the primary roll thruster was successful.