Member Briefing May 22, 2025
20-Year Treasury Auction Goes Badly, Yields Spike as Bonds Sell Off
A sale of 20-year U.S. government bonds saw weak demand Wednesday, pushing the Treasuries to new lows for the year as yields climbed. The Treasury Department sold $16 billion of newly issued 20-year bonds at 1 p.m. Eastern. It’s routine for the Treasury Department to borrow to fund the government. This auction, however, saw heightened interest as investors worried that increased uncertainty about the U.S. economic policies would lead to less demand for the Treasuries. Their fears were spot on.
The auction saw investors accept a yield of 5.047% on the 20-year note, compared with the past six auctions’ average of 4.613%. It was also 0.011 percentage points higher than the yield seen before the bidding deadline. This was the first time the Treasury sold a 20-year note with a rate over 5% since October 2023. Back in the pandemic, it could sell its 20-year debt at 1.22%. Higher rates signal that demand is weak, as the Treasury has to entice investors with higher yields to buy U.S. debt. To be sure, such market reactions for a 20-year bond are abnormal. The 20-year Treasury debt is long understood to be the awkward middle child of the bond market. It isn’t a natural security for investors to buy. Investors tend to prefer 10-year and 30-year debt, which are more liquid.
Tariffs Impacted Earnings Across Manufacturing In Q1
From tractor manufacturing to drugs and chemicals, companies across the industry are feeling the brunt of the Trump administration’s heavy tariff policies. During first quarter earnings season, executives detailed their plans to soften the blow of tariffs, which are costing manufacturers hundreds of millions of dollars in lost revenue and heightened input costs. Ford Motor Co. is facing some of the worst impacts — the company expects up to $1.5 billion in lost net profits. The automaker is experimenting with a variety of actions to mitigate that cost, including transporting vehicles from Mexico to Canada using bond carriers, so they are not subject to U.S. tariffs.
Others, like Deere & Co., are working to ensure more of their products are compliant with the U.S.-Mexico-Canada Agreement, or considering price increases in 2025 or 2026. Manufacturing Dive has been following the impact of tariffs on the Q1 manufacturing earnings season. Click the link below for updates on how companies like 3M and Caterpillar are navigating the volatility.
Read more at Manufacturing Dive
Can Trump's Tariffs Help Create a 'Golden Age' of US Manufacturing?
President Donald Trump has said he wants to return the United States to a "golden age" of manufacturing and is trying to force the issue for many industries by slapping high tariffs on foreign products. To some, like former Trump White House adviser Steve Bannon, the initial disruption is the path to a "robust," "hegemon-like," "reindustrialized" America—one that promises to put tens of thousands back to work in well-paying manufacturing jobs. Others, like Colin Grabow, associate director at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, argue the entire premise of reshoring and reindustrialization is flawed, as American manufacturing isn't on the decline, just manufacturing employment.
Total industrial production in the U.S. is on the rise, rebounding from a sharp dip in April 2020 during the COVID-19 pandemic and returning to around 2018 levels, according to Federal Reserve Economic Data, or FRED. Industrial output now surpasses the heyday of American factories—thanks largely to efficiency gains and technological innovation. Manufacturing employment, however, has steadily declined over the past few decades—a core concern for Trump supporters rallying around the promise of reshoring, which promises to bring tens of thousands of jobs back stateside. Manufacturing jobs in the U.S. hit a peak in 1979, with over 19 million people employed in the sector, according to the U.S. Bureau of Labor Statistics. Forty years later, manufacturing jobs accounted for less than 13 million in the U.S.
Global Headlines
Middle East
- Iran Parliament Approves Strategic Pact With Russia – Reuters
- Iran’s Supreme Leader Rejects US Stance On Uranium Enrichment - AP
- U.S. Eased Syria Sanctions Over Fears of Imminent Collapse, Rubio Says - WSJ
- Airstrikes Kill Dozens In Gaza; International Criticism Of Israel Grows - Reuters
- Israeli Army Fires ‘Warning Shots’ At French And Other Diplomats Visiting West Bank – France 24
- EU To Launch Israel Trade Review As Gaza Crisis Worsens - Politico
- Netanyahu Confronts New Political Dilemma as Allies Push for End to Gaza War - WSJ
- Oil Prices Rise On Reports Of Israel Planning Strike Against Iran - Yahoo
- Iran Executes A Man Convicted Over The 2023 Attack On The Azerbaijan Embassy That Killed 1 Person - ABC
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Putin Visits Kursk Region For First Time Since Ejecting Ukrainian Forces – Reuters
- EU Enacts Harsher Energy Sanctions On Russia, While U.S. Ponders Them - Forbes
- Ukraine Pitches Tougher Russia Sanctions Plan To EU As US Wavers - Reuters
- Six Ukrainian Soldiers Killed In Russian Strike On Training Exercise - BBC
- Canada Sends 'Strong Message' On Ukraine At G7 Finance Ministers Summit – France 24
- Adviser To An Ex-Ukrainian President Is Killed Near An American School In Spain, Officials Say - AP
- NATO Shows Force on Northern Flank with Russia as US Pulls Back – 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
- Rice Scandal Topples Japan’s Agriculture Minister – Politico
- The Risk of War in the Taiwan Strait Is High—and Getting Higher – Foreign Affairs
- Marcos To Focus On Economic Agenda To Build Legacy – Nikkei Asia
- Romanian Vote Loser Simion Claims France Interfered In Election - Politico
- Italy's Meloni Ready To Help If Vatican Agrees To Trump's War Mediation Plan - BBC
- Tigers, Jaguars And Elephants Are The Latest To Flee Cartel Violence In Mexico’s Sinaloa - AP
- Trump Ambushes South African President In Oval Office With Claims Of 'White Persecution'- BBC
- Brazil Supreme Court Opens Landmark Coup Trial Against Bolsonaro – France 24
- Spike in Policy Uncertainty Threatens Financial Stability, ECB Says - WSJ
Policy and Politics
GOP Hard-Liners Threatening Late Revolt Over ‘Megabill’ - Conservatives Frustrated by SALT Cap Increase
House Speaker Mike Johnson is facing a last-minute rebellion from conservatives on Republicans’ megabill, with a deal on a key tax deduction with blue-state Republicans and a lack of progress on settling other key provisions frustrating hard-liners. “I think actually we’re further away from a deal because that SALT cap increase, I think, upset a lot of conservatives,” Rep. Andy Harris (R-Md.), the House Freedom Caucus chair, said in an interview on Newsmax on Wednesday morning, referring to the state-and-local-tax deduction. “The conservatives are pushing for some balancing spending reductions.”
In a brief interview Wednesday morning, Johnson said “there is a chance for a vote today” when asked about the comments by Harris and other conservatives. He said he continues to talk with the conservative holdouts. Johnson and a group of blue-state Republicans reached a critical but tentative deal Tuesday night to boost the cap on the state-and-local-tax deduction to $40,000 in the GOP domestic-policy bill that is at the center of President Donald Trump’s agenda on taxes, energy and the border. Conservatives have strongly opposed further increasing the SALT cap.
Packaging Bill Heads To State Senate Floor – Business Groups Oppose the Bill as Written
The Plastic Reduction and Recycling Infrastructure Act is officially on the move, advancing out of committee and to the Senate floor. The measure passed the upper chamber last year but did not advance in the Assembly. State Sen. Pete Harckham celebrated the advancement Tuesday, telling Spectrum News 1 that he feels the controversial piece of legislation has been successfully amended to address industry concerns. In the Assembly, Assemblymember Deborah Glick carries the "extended producer responsibility" legislation, which would require companies with an income in excess of $1 million to reduce their use of plastic by 30 percent over 12 years and phase out 17 toxic chemicals.
Many Republicans, along with the Business Council of New York State and other business groups, oppose the bill, arguing its mandates will drive up costs while stifling innovation. “It’s going to have a cost impact as companies have to reformulate not only their products but their processes. It’s also going to make some products in our view not sellable in New York State,” said Ken Pokalsky, vice president of The Business Council. The Business Council is backing another bill sponsored by state Sen. Monica Martinez that also claims to put the responsibility on the producer. They argue it avoids what they describe as unrealistic mandates, excessive material bans that they say target materials already regulated by the FDA, and would allow more industry input.
Read more at New York State of Politics
Over 40 Air Traffic Control Outages At Dozens Of U.S. Airports Since 2022, Report Says
More than 40 reports of radar and radio failures at dozens of airports nationwide were filed to NASA’s Aviation Safety Reporting System since 2022, CNN reported. In Tampa, in 2023, one veteran air traffic controller described losing all contact with pilots as two planes, including a commercial passenger flight, narrowly missed each other after converging on a clear “collision course.”
Describing a tech failure in 2022 that “literally put someone’s life in danger,” an Indiana-based air traffic controller described losing communication with a plane making an emergency landing after a door blew off. The FAA did not confirm the accuracy of CNN’s report, but said in a statement: “The FAA has more than 74,000 pieces of equipment in the National Airspace System. Every air traffic control facility has a contingency plan to ensure safety, and we have built-in redundancies, backup systems, and procedures in the case of system failure, weather, or other unplanned event.”
Political Headlines
- Who Benefits Most From The State And Local Tax Deduction And Why Raising The Cap Is Contentious – Yahoo Finance
- Justice Dept. Investigating Former New York Gov. Cuomo Over Pandemic Testimony - AP
- US Launches Nuclear-Capable Missile in Arms Race With Russia and China - Newsweek
- Trump Administration Formally Accepts Gift Jet From Qatar - CNBC
- OSHA Updates Inspection Program, Will Look At Companies That Have The Highest Injury Rates – EHS Today
- Rep. Gerry Connolly, Top Democrat On The Oversight Committee, Dies At 75 - NBC
- Supreme Court Backs Republican Lawmaker In Maine Who Was Punished For Transgender Athlete Remarks – SCOTUS Blog
- Senate Passes No Tax On Tips Act: What To Know About The Bill And What Comes Next – The Hill
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
Youngest Generation Is Facing A Host Of Completely Unique Health Threats
Adolescence can be rife with anxieties and challenges, but today’s youth face unique threats on a scale encountered by no previous generation, according to an exhaustive new report on their health and wellbeing. More than one billion people aged 10 to 24 are at risk of poor health outcomes by 2030, which is at least half the global adolescent population, concluded the report published on Tuesday in the Lancet, a leading medical journal. Adolescents are experiencing rising rates of obesity and mental health struggles, while also grappling with the influence of digital technologies and a destabilized global climate.
“What life is like as an adolescent today is very different than ten years ago,” says Sarah Baird, a professor of global health and economics at the George Washington University. “Given all these other competing demands for resources, attention, and focus, adolescents have once again fallen into the background. It’s time to really remind people of why they're important, and that ignoring them in this time of rapid change is potentially disastrous.” Though there is some good news in the report’s findings—declining rates of cigarette smoking and alcohol use and better access to education, particularly for girls—the report warns that the health of young people is at “a tipping point” in an uncertain and rapidly changing world. Here are some of the top concerns.
Read more at National Geographic
Industry News
Trade War Updates
- Which Companies Are Eating Tariffs? – Marketplace
- US And China Trade Truce Grows Fragile Amid War Of Words Over Chips - Yahoo
- Commerce Asks Automakers For Supply Chain Data For Tariff Evaluations – Automotive Dive
- Japan’s Exports Slow In April As Trump’s Tariffs Dent Shipments To The U.S. - AP
- American Brands Have A New Image Problem – The Economist
- Volvo May Build A New Plug-In Hybrid In South Carolina – Automotive Dive
- How Lumber Duties Could Worsen Home Affordability In The U.S. - CNBC
- SharkNinja To Pull China-Based Manufacturing To Avoid Tariffs – Manufacturing Dive
- Dollar Hits One-Month Low as G-7 Stirs Fresh FX Policy Watch -YahooFinance
- From Soft Landing To Stagflation, Global Supply Chains Are Feeling The Strain – IndustryWeek
Nvidia’s Huang Calls U.S. Export Controls a Failure
Nvidia NVDA -0.88%decrease; red down pointing triangle Chief Executive Jensen Huang said U.S. export controls limiting the sale of advanced chips to China have been a failure, and commended President Trump for reversing a core part of the Biden administration’s policy. The controls have galvanized China to push ahead with building its own artificial-intelligence technologies, and Nvidia has over the past four years lost market share to domestic competitors there, Huang said. Huang said Wednesday that China was the second-largest computer market globally and would be a $50 billion AI market next year. Revenue from China, he said, could translate to tax dollars and jobs for the U.S.
“The local companies are very talented and very determined, and the export controls give them the spirit, energy and the government support to accelerate their development,” Huang said in Taipei, where he is attending an industry conference. The Biden administration introduced a series of measures crimping the ability of U.S. companies to sell cutting-edge chips, chip-related equipment and technologies to China over national-security concerns. The curbs have particularly affected Nvidia, the leader in chips for AI applications, and many remain in place under Trump.
Boeing Increases 737 Production Pace As Quality, Safety Culture Improves
Boeing expects to stabilize 737 MAX production at 38 airplanes a month over the next couple of months, its Commercial Airplanes Vice President of Quality Doug Ackerman told reporters on Tuesday. The U.S. Federal Aviation Administration capped output at 38 airplanes a month after a mid-air panel blowout in a nearly new 737 in January 2024. Prior to that, monthly production of its best-selling airplane had bounced between the teens and the thirties. Boeing chief executive Kelly Ortberg previously said that the company needs to prove it can maintain production at that level for several months before it asks the FAA to lift the cap.
Boeing is making steady progress on all six production quality and safety metrics created by the company and regulators, according to its annual Chief Aerospace Safety Officer Report, which was released on Wednesday. Ongoing changes continue to make the program more effective, Chief Aerospace Safety Officer Don Ruhmann said during the media briefing on Tuesday. Boeing is also using machine learning to catch quality problems in its supply chain before they become widespread. While it is still "fine tuning" the approach, it is seeing statistical correlations between the data and the likelihood of supply chain issues, Ackerman said.
Target Cuts Sales Outlook As Retailer Blames Tariff Uncertainty And Backlash To DEI Rollback
Target on Wednesday cut its full-year sales outlook, as executives said weaker discretionary spending, consumer uncertainty about tariffs and backlash to the company’s rollback of key diversity, equity and inclusion efforts hurt its business. First-quarter sales missed Wall Street’s expectations and fell nearly 3% compared to the year-ago period. Transactions across Target’s stores and website dipped by 2.4%. And the average amount customers spent during their online and in-store visits decreased by 1.4%.
The retailer reported for the fiscal first quarter earnings per share of $1.30 adjusted and revenue of $23.85 billion. In the three-month period that ended May 3, Target’s net income rose to $1.04 billion or $2.27 per share, from $942 million, or $2.03 per share, in the year-ago period. Comparable sales declined by 3.8% in the quarter compared to the year-ago period, as comparable store sales fell 5.7% and digital sales grew 4.7%. Target said it now expects a low-single digit decline in sales this fiscal year, compared to a previous forecast of net sales growth of about 1%. It said it expects adjusted earnings per share, excluding gains from litigation settlements, to be about $7 to $9, compared to the range of $8.80 to $9.80 that it had previously anticipated.
Lowe’s Sticks By Full-Year Forecast As Sales From Home Professionals Boost Business
Lowe’s on Wednesday stood by its full-year forecast, as growing sales among home professionals helped offset slower demand from do-it-yourself customers. The home improvement retailer came in just shy of Wall Street’s expectations for quarterly sales, but beat earnings estimates. In the company’s news release, CEO Marvin Ellison said investments in its stores, technology and customer service have helped the retailer get through “near-term uncertainty and housing market headwinds.”
Here’s what the company reported for the fiscal first quarter: Earnings per share were: $2.92 and revenue was $20.93 billion. In the three-month period that ended May 2, Lowe’s net income fell to $1.64 billion, or $2.92 per share, compared with $1.76 billion, or $3.06 per share, in the year-ago quarter. Comparable sales decreased 1.7% year over year. Weather hurt sales demand, but sales on Lowe’s website and among home professionals grew, the company said in a press release. Lowe’s said it expects full-year total sales to range from $83.5 billion to $84.5 billion, which on the upper end would be higher than its total revenue of $83.67 billion for fiscal 2024. It said it expects comparable sales to be flat to up 1% year over year and earnings per share to range from approximately $12.15 to $12.40.
TJX Posts Downbeat Outlook on Tariffs Hit
TJX Companies posted a weak second-quarter outlook as tariffs weighed on its business. The downbeat outlook came as the parent company of T.J. Maxx, HomeGoods, and Marshalls posted higher-than-estimated first-quarter results. TJX reported adjusted earnings per share (EPS) of $0.92 for its fiscal 2026 first quarter on revenue of $13.11 billion. Analysts polled by Visible Alpha expected $0.90 and $13.02 billion, respectively.
TJX's forecasts for the second quarter lagged estimates, however. The company forecast EPS in a range of $0.97 to $1.00, below estimates of $1.02 as per Visible Alpha. “The Company’s second quarter Fiscal 2026 outlook includes an incremental negative impact from tariff costs on the merchandise it was committed to at the time additional tariffs were announced in March and April of 2025,” it said. TJX also said it expects second-quarter sales to rise between 2% and 3%. The retailer stuck with its fiscal 2026 projections of a 2% to 3% increase in comparable sales and EPS of $4.34 to $4.43.
PPG Invests $380M To Build Aerospace Coatings And Sealants Manufacturing Facility In North Carolina
PPG has announced plans to build a new aerospace coatings and sealants manufacturing facility in Shelby, North Carolina. The company, which produces paints, coatings, and specialty materials, is investing $380 million into the project and expects to create more than 110 new jobs. The facility will be located on a 62-acre site and span 198,000 square feet, with construction scheduled to begin in October 2025 and completion anticipated in the first half of 2027.
PPG will manufacture the full range of the company’s aerospace coatings and sealants at the site. Designed to support growing industry demand, the site will include both manufacturing and warehousing units. Proximity to key transport routes is expected to improve supply chain efficiency and customer service. PPG will also integrate advanced manufacturing technologies to reduce environmental impact while maintaining high standards of quality and safety.
OpenAI’s Biggest Data Center Secures $11.6 Billion in Funding
A Texas data center that the startup Crusoe is building for OpenAI has secured $11.6 billion in new funding commitments, expanding a site that is core to increasing the ChatGPT maker’s long-term computing capabilities. The funding, a mixture of debt and equity, will expand the data center to eight buildings from two and increase the total amount secured for the project to $15 billion, Crusoe said. Both Crusoe and investment firm Blue Owl Capital OWL -2.04%decrease; red down pointing triangle are contributing cash to the data center project as part of the latest financing.
The data center, which is slated for completion next year, is expected to be the largest used by OpenAI. Each of the buildings will run up to 50,000 Nvidia Blackwell chips, which are commonly used for training large language models. The development of the Abilene site is a key step in reducing OpenAI’s reliance on Microsoft in the race to build the next generation of AI models. For years, the startup exclusively relied on Microsoft for its computing power, but grew frustrated that the tech giant wasn’t keeping up with demand. Last spring, it struck a deal with Oracle to use the Abilene site after receiving the signoff from Microsoft.
Pratt & Whitney Resuming Talks to Resolve Strike
Negotiators for Pratt & Whitney and the International Assn. of Machinists and Aerospace Workers are due to resume talks on Thursday, May 22, aiming to resolve a now three-week-long strike by about 3,000 union members at two plants in Connecticut. About 3,000 workers launched their first work-stoppage in more than 20 years on May 5. The jet-engine manufacturer reportedly has assigned non-production engineering employees to staff the operations in East Hartford and Middletown, including the GTF geared turbofan engine supplied to Airbus for its A320neo jets, among other high-volume aircraft programs. The F135 engine that powers the Lockheed Martin F-35 Joint Strike Fighter is also produced in Connecticut.
The jet-engine manufacturer reportedly has assigned non-production engineering employees to staff the operations in East Hartford and Middletown, including the GTF geared turbofan engine supplied to Airbus for its A320neo jets, among other high-volume aircraft programs. The F135 engine that powers the Lockheed Martin F-35 Joint Strike Fighter is also produced in Connecticut.
Read more at American Machinist