“Temporary” is back
Jay Powell wants businesses and investors to know. The Fed Chairman shares concerns about President Trump's tariff skirmish as the economic outlook gets darker.
But he said Wednesday at a press conference. Tariff-driven inflation is “temporary” and could only be for this year. It's a “base case,” he added. The S&P 500 futures were up Thursday this year as traders priced at around two to three interest rate cuts.
But the “temporary” label — something that Treasury Secretary Scott Bescent accepted — issued alarms elsewhere.
It remains a stacked term, especially for critics of the Fed's handling of inflation during the pandemic era. Some people worry that they may be misplaying the risks of Trump's trade war, as Powell did in 2022 when he misrepresented inflation as “temporary.”
Several economists are seeing tariffs that disrupt the global supply chain, raise prices and extend dents. And Trump reiterated that more tariffs are coming. “April 2 is America's liberation day!!” he wrote on Wednesday in True Social.
It is too early to say, “Whether the inflation effect is temporary, especially considering that businesses and households still have a recent history of unexpected inflation.”
Trump has also raised doubts on the central bank. It stayed on a variance from 4.25% to 4.5% beyond that rate decision. “As U.S. tariffs begin its path to the economy (easiness!), the Fed will have far better cut rates,” Trump wrote of the true society. “Do the right thing.”
Central banks have tariff risks. The new outlook for the Fed is that the economy will expand 1.7% this year, down from its previous 2.1% growth forecast. They also predict that unemployment and inflation will rise. Otherwise, the economy is “solid,” Powell said.
Some businesses and households see things differently. Research shows that business sentiment is weakened and consumer inflation increases. This downbeat atmosphere was during the Biden administration. However, adding uncertainty in the trade war, some economists and Wall Street analysts have begun to raise the possibility of a recession.
Powell performed it on Wednesday. “We understand that emotions are falling pretty sharply, but economic activity isn't yet, so we're looking closely,” he said. “It tells people that the economy appears to be healthy.”
Not everyone is buying that rating. Torsten Slok, chief economist at Apollo Global Management, told Bloomberg TV this morning that recent stock bumps looked “unfair” and he expressed surprise at Powell's temporary rating.
“This assumes that there's only one set of tariffs coming,” he said. “There are a lot of other dominoes too.”
This is what's going on
Elon Musk's X is said to raise about $1 billion in new stock funding. According to Bloomberg, the investments from Musk, Darusana Capital Partners and conservative-centric 1789 Capital value the social media platform at around $32 billion. (This is roughly the same as the stock valuation that Musk bought the company in 2022. It adds the $12.5 billion that Musk borrowed and gives it a more famous $44 billion corporate value, although those figures were not compared.) X says advertising revenues have recovered.
President Trump is once again targeting higher education. His administration has moved to a $175 million freezing federal funding at the University of Pennsylvania, with the support of transgender athletes. His pressure on the university, including the University of California no longer requires the use of diversity statements to employment, appears to have resulted. More broadly, he is expected to sign an executive order on Thursday, with the aim of demolition of the education sector. (They cannot be dissolved without the approval of the Congress.)
Paul Weiss' chair is said to be seeking a deal with Trump. Brad Carp, a top advisor to corporate leaders and a well-known Democratic donor, has met with administrative authorities to repair relationships after Trump cracks down on the law firm, Semafor reports. This is an indication of what existential Trump attacks are beginning to look at law firms like Paul Weiss, Covington & Burling and Perkins Coy. Paul Weiss reportedly lost at least one client in the collision, according to Reuters.
Tesla bulls get nervous
Elon Musk's political power shows little indication of decline, but the company, which remains a vast source of his wealth, continues to struggle.
Tesla's plight – including stock prices decline. The sudden reputation with Democrats, a core segment of the EV buyer market. And the growing competition with Chinese rivals has come to the point that even some of the company's most enthusiastic supporters are beginning to sweat. And they're pointing their fingers at the CEO of the automaker
“Tesla is experiencing a crisis,” Wedbush Securities analyst Dan Ives wrote in a research note on Wednesday. He noted the surge in vandalism and violence at some of the company's dealers, as well as protests against masks.
This adds to the decline in Tesla sales around the world, especially in Europe and even China. Speaking of which, Chinese rivals continue to win Musk's automakers with key technologies such as battery charging, and critics are pose more challenges for Tesla in one of its biggest markets.
The problem is that Musk focuses on his government work. The billionaire's cost-cutting efforts against the Trump administration reflect a seemingly extraordinary force for private businessmen, gaining important political support for his business. Consider Attorney General Pam Bondy labeled the attacks on Tesla dealers as domestic terrorism, or that President Trump and Secretary of Commerce Howard Lutnick both publicly praise the company.
But it's a double-edged sword, Ives adds. “This essentially transformed Tesla into a political symbol,” he writes. “And this is a bad thing.”
Other longtime Tesla Bulls are also concerned about Musk's political activities, including investors Ross Gerber and Christopher Tsai.
Masks need better time management, the Tesla Bulls agree. Ives writes that Musk should announce that it will balance the car maker with the so-called government efficiency and lay out a roadmap for producing cheaper models. Ives previously told Bloomberg that he raised concerns to the Tesla board, urging Musk to “come back.”
Separately, Gerber said Musk should resign as Tesla's chief or as department leader.
Musk himself recently told the Fox Business Network that his Doge work could last another year.
That said, many supporters still have great hopes for Tesla. The company's Ives price target is $550 per share, closing at nearly $235.86 on Wednesday. In fact, the average stock price target set by Tesla analysts is $365.70, according to Factset. This is an indication that for all the plight of the company, Wall Street believes Musk can turn things around.
What Theskimm says about digital media
Theskimm was a burgeoning newsletter aimed at young women, once considered by many as the future of publication.
On Wednesday, the company announced its sale to Ziff Davis, a century-old publisher who runs old digital media sites such as Mashable and CNET.
Here's one way to view transactions: Theskimm has found a way to survive. It reportedly peaked at 7 million subscribers, but that number has since fallen. The company has raised about $28 million and currently runs other newsletters, podcasts and affiliate marketing businesses that are all standard elements of today's publishing playbook.
However, Theskimm couldn't become a brand big enough to thrive on its own. When Axios was asked if the company was profitable, its co-founder said it had a proven track record as a profitable company.
The terms of the transaction have not been disclosed. The company's co-founders Daniel Weisberg and Carly Zakin continue to operate. (The New York Times Company purchased a 1% stake in the company in 2016 at a $55 million valuation.)
More Accurate Picture: Theskimm is another of a long line of media startups struggling to build major news brands, and helps to prove the industry's extensive papers.
Consider that once valued at $1.7 billion and considered a potential rival to the Times, BuzzFeed has broken up its news division and is now trading at a $80 million valuation of Nasdaq. The assistant media went bankrupt in 2023, and the owner of that new private equity has since attacked staff. The new owners of Daily Beast are cutting costs.
Media efforts focusing on other women have also been founded, including Renee Letter, founded by actress and producer Lena Dunham, and rookies created by writer and actress Tavi Gevinson.
However, other new digital media companies have been successful, including many that have been built on newsletter platforms such as Beehiiv and Substack. Among them is slow bowling, focusing on the politics of Matt Iglesias, who earns over $1 million a year, and Oliver Darcy's media-focused status.
In particular, these are small operations with target areas of interest to claim access, and digital media entrepreneur Jessica Lesson recently said that dealbooks are often overlooked markets.
“After learning 10 years of wrong lessons about how to build a media business, what great media entrepreneurs are thinking now is that there is a lot of growth, opportunities and impact by serving those communities,” she says, “large media organizations aren't getting memos.”
To be fair, there are also startups such as Semafor, who are aiming for a wider audience, including more newsletters, podcasts, and conference businesses.
(Hey, Ben Smith and Justin Smith, the dealbook is open to Q&A with you – if you reveal some hard numbers.)
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artificial intelligence
Italian newspaper IL Foglio says that the journalists who have been “questioning” AI have released an edition that is fully compiled by AI, including headlines, quotes and summaries, which have been reduced to “questions” by AI agents. (The Guardian, IL Foglio)
China's tech giant Tencent is planning to rapidly increase its spending on AI and keep pace with rivals like Deepseek and Alibaba. (Bloomberg)
Best remaining
Ben & Jerry accused Unilever, the company's parent, of firing CEOs for allowing ice cream makers to talk about political issues. (NYT)
“UBS client says his wife moved in with a wealth advisor. It got messy,” Bloomberg
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