Portfolio Update – May 2025

General news

• On 01/05/2025, President Trump blamed former President Biden for the U.S. economy’s 0.3% contraction in Q1 2025, despite evidence showing the decline was driven by pre-tariff import surges and reduced government spending. Trump, who took office on January 20, claimed the weak figures were a “Biden overhang” and unrelated to his own policies, urging patience as tariffs begin to take effect. However, analysts and economic reports attribute falling GDP, weak job growth, and market volatility partly to uncertainty surrounding Trump’s aggressive trade moves—casting doubt on his attempts to deflect blame while simultaneously taking credit for future improvements.
• U.S. inflation, measured by the PCE Price Index, slowed to 2.3% year-over-year in March from 2.5% in February, slightly above the expected 2.2%, while core PCE fell to 2.6%, matching forecasts. Personal income and spending both rose more than expected, increasing 0.5% and 0.7% respectively in March.
• Japan’s central bank kept its policy rate steady at 0.5% for a second consecutive meeting, as U.S. tariffs imposed by President Trump cloud the economic outlook. While inflation remains above the Bank of Japan’s 2% target, giving it leeway for future hikes, the bank cited weakening global growth and falling domestic corporate profits as risks. It expects inflation to stay around 2% through fiscal 2027 but emphasized that any major shifts in tariffs could impact its policy trajectory.
• U.S. companies sharply slowed hiring in April, adding just 62,000 private sector jobs, as fears over President Trump’s tariff policies dampened business confidence, according to ADP. This marked the weakest monthly gain since July 2024 and fell well short of economists’ expectations for 120,000 new jobs. While some sectors like leisure and hospitality, and construction saw modest growth, others—like education and health services—shed jobs. Wage growth also cooled slightly, reflecting broader uncertainty. The report sets a cautious tone ahead of Friday’s official government employment data.
• On 02/05/2025, China is considering recent U.S. efforts to start trade talks amid an escalating tariff war, but emphasized that any negotiations must begin with the removal of all unilateral U.S. tariffs. Beijing criticized Washington’s 145% tariffs as insincere and warned they could further erode trust. While both countries have granted some product exemptions, tensions remain high. Market reactions were positive, with the offshore yuan strengthening and Hong Kong stocks rising, as signs of potential dialogue emerged despite conflicting messages from both governments.
• On 03/05/2025, U.S. job growth in April exceeded expectations with 177,000 nonfarm payroll additions, surpassing forecasts despite concerns over President Trump’s tariffs. The unemployment rate held steady at 4.2%, while broader unemployment fell to 7.8% and labor force participation ticked up to 62.6%. Key job gains came from health care, transportation, and financial services, while government and manufacturing jobs declined. Wages grew modestly at 0.2% monthly and 3.8% annually. Markets reacted positively, with traders delaying interest rate cut expectations, though economists warned tariff effects may not yet be fully reflected in the data.
• U.S. stocks surged Friday following a stronger-than-expected April jobs report, easing recession fears and fueling the S&P 500’s longest winning streak since 2004. The S&P 500 rose 1.47% to 5,686.67, marking its ninth consecutive gain, while the Dow and Nasdaq climbed 1.39% and 1.51%, respectively. The 177,000 payroll increase beat expectations and helped markets rebound from losses triggered by President Trump’s tariff announcements in early April. Optimism was also supported by signs that China may engage in trade talks. Despite mixed earnings from Apple and Amazon, investor sentiment remained upbeat as markets ended their second consecutive positive week.
• Temu has overhauled its U.S. operations in response to the expiration of the de minimis rule and new 145% tariffs on Chinese imports enacted by President Trump. As of Friday, the bargain retailer now only shows products shipped from U.S. warehouses, marking a major shift from its previous model of direct-from-China shipping that allowed ultra-low prices. The de minimis rule had enabled items under $800 to enter duty-free, but its removal has led Temu to suspend ads, raise prices, and recruit U.S. sellers. Similar changes have hit rivals like Shein and Amazon’s Haul, as tariffs reshape the low-cost e-commerce landscape.
• Warren Buffett announced that Greg Abel will take over as CEO of Berkshire Hathaway by the end of the year, marking a significant leadership transition after nearly 60 years. At 94, Buffett said the time has come for Abel, currently vice chairman of non-insurance operations, to lead the company, although Buffett will remain involved in an advisory capacity. Buffett emphasized he won’t sell any shares, believing Berkshire’s future is even brighter under Abel’s leadership. With a hands-on management style and a commitment to Buffett’s long-term value investing approach, Abel, a 25-year veteran of the company, is set to manage Berkshire’s vast $347 billion cash reserve and diverse portfolio.
• Following a decisive reelection victory, Australia’s Labor government, led by Prime Minister Anthony Albanese, is focusing on managing the economic fallout of U.S.-China trade tensions, which Treasurer Jim Chalmers described as casting a “dark shadow” over the global economy. Albanese pledged a disciplined and unified second term, with Labor projected to expand its parliamentary majority. The opposition’s loss, including conservative leader Peter Dutton’s seat, was attributed to unpopular policies and voter anxiety over Trump’s tariffs and their potential impact on inflation and retirement funds.
• On 06/05/2025, U.S. crude oil prices fell 2% on Monday to $57.13 per barrel—marking a four-year low—after OPEC+ announced a second consecutive production increase, adding 411,000 barrels per day in June. Combined with May’s hike, the group is bringing over 800,000 bpd of new supply to market, outpacing expectations and contributing to a roughly 20% drop in oil prices this year. Weakened by fears of a recession triggered by U.S. tariffs and oversupply concerns, Goldman Sachs cut its oil forecast and warned of continued downside risk. The price slump is also prompting oilfield service firms and majors like Chevron and Exxon to scale back exploration investments.
• On 07/05/2025, India launched “Operation Sindoor,” striking nine sites in Pakistan and Pakistani-administered Kashmir it claims were used for planning terrorist attacks, while emphasizing the attacks were targeted, restrained, and avoided Pakistani military facilities. Loud explosions were reported, and Muzaffarabad experienced a blackout, though the nature of the blasts remains unclear. Pakistan confirmed missile strikes at three locations and vowed retaliation, as tensions escalate following last month’s deadly attack on Hindu tourists in Indian Kashmir, which India blames on Pakistan—an accusation Islamabad denies.
• The Taiwanese dollar retreated over 3% Tuesday after a historic two-day surge driven by exporters and insurers converting U.S. dollar holdings amid speculation of U.S. pressure for a stronger currency. Despite official denials, analysts suspect Taiwan’s central bank is allowing appreciation to support trade talks with Washington. The pullback followed importers’ renewed dollar demand, but analysts say TWD strength could continue if U.S.-China trade tensions ease and U.S. tariffs backfire, potentially setting the stage for a quiet realignment akin to a “Plaza Accord 2.0.”
• Canadian Prime Minister Mark Carney firmly rejected U.S. President Donald Trump’s recurring suggestion that Canada become the 51st U.S. state, declaring in a White House meeting on Tuesday that “Canada is not for sale.” The exchange—though civil in tone—highlighted the sharp divide between the two leaders on sovereignty, with Trump responding, “Never say never,” and later doubling down on social media with claims that the U.S. subsidizes Canada by $200 billion annually. While Trump’s figures largely stem from U.S. defense spending and a $63.3 billion trade deficit, Carney made clear that Canadians remain unified in rejecting any notion of statehood. Despite the tensions, both leaders signaled that trade negotiations will continue, even amid heated rhetoric.
• On 08/08/2025, China’s central bank has unveiled a comprehensive monetary stimulus package—including interest rate cuts and a reduction in banks’ reserve requirements—to boost growth amid intensifying trade pressures and slowing domestic demand. Key actions include a 10 basis-point cut to the seven-day reverse repo rate (now at 1.4%), a 50 basis-point reduction in the reserve requirement ratio effective May 15, and targeted support for sectors like real estate, technology, and elderly care through a new 500-billion-yuan relending tool. Mortgage rates and auto financing reserve requirements were also lowered. While these moves inject over 1 trillion yuan in liquidity, economists caution that weak credit demand and subdued consumer confidence may limit their effectiveness. Analysts note that with the yuan stabilizing, Beijing has more room to ease policy without risking capital flight, though additional fiscal stimulus has yet to materialize.
• The Federal Reserve kept its benchmark interest rate steady at 4.25%–4.5% on Wednesday, citing heightened uncertainty around the economic outlook as it awaits clarity on the Trump administration’s evolving trade policy. While not explicitly mentioning tariffs in its statement, Fed Chair Jerome Powell acknowledged the risks during a press conference, noting that trade tensions could simultaneously raise inflation and slow growth, raising concerns about a potential stagflation scenario. Despite mixed economic signals—including a slight GDP contraction in Q1, steady job growth, and inflation nearing the Fed’s 2% target—the central bank emphasized patience in its policy approach. The Fed’s cautious stance comes as the White House engages in trade negotiations following recent tariff hikes, and markets remain sensitive to the possibility of prolonged economic disruption.
• On 09/05/2025, The U.S. and U.K. finalized a trade agreement on Thursday, marking the first such deal under President Trump’s new tariff policy, but it falls short of being tariff-free. While the U.K. secured some sector-specific concessions—like tariff-free access for steel and aluminum exports and a cap of 100,000 vehicles annually at a reduced 10% duty—most U.K. goods will still face a 10% baseline tariff, the minimum under Trump’s strategy. Trump emphasized that this rate is favorable, with other nations potentially facing higher tariffs due to trade imbalances. Analysts noted that while the deal offers limited relief for select U.K. industries, it signals the U.S.’s intent to maintain the 10% baseline broadly, potentially slowing domestic economic growth due to higher consumer costs. Critics also highlighted that the agreement does more to reinforce political ties than significantly boost trade, with key limitations especially affecting major British automakers like Jaguar Land Rover.
• On 10/05/2025, President Trump suggested lowering tariffs on Chinese goods to 80%, down from the current 145%, ahead of trade talks in Switzerland, though it’s unclear if this is a final target or a negotiation tactic. While still high compared to the 10% baseline in the U.S.-U.K. deal, the move signals a possible shift in trade policy. Talks are expected to focus on stabilizing relations rather than reaching a full agreement, amid concerns over declining U.S.-China trade volumes and potential supply shortages.
• On 11/05/2025, High-stakes U.S.-China trade talks in Geneva ended Saturday with no clear progress but will resume Sunday, as both sides seek to ease tensions over punishing tariffs that have disrupted global trade. Despite a lengthy meeting between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, officials remained silent on outcomes, and hopes for a major breakthrough remain low. President Trump has floated reducing tariffs on Chinese goods from 145% to 80%, though uncertainty persists. Meanwhile, Switzerland is navigating its own tariff challenges with the U.S., warning of economic impacts but refraining from retaliation.
• China’s factory-gate prices fell 2.7% in April—the sharpest drop in six months—while consumer prices declined for a third straight month, reflecting persistent deflationary pressure amid a prolonged housing slump, weak consumer demand, and trade tensions with the U.S. Despite hopes of tariff relief from ongoing U.S.-China talks in Switzerland, economists warn tariffs are unlikely to return to pre-April levels. To counter slowing growth and boost domestic demand, Beijing has rolled out stimulus measures including rate cuts and liquidity injections. However, investor confidence remains low, and major banks have trimmed China’s GDP outlook below the 5% target.
• On 12/05/2025, The U.S. and China have agreed to suspend most tariffs, cutting reciprocal rates from 125% to 10% following productive trade talks in Switzerland. While the U.S. will maintain a 20% tariff on Chinese fentanyl-related imports, overall tariffs on Chinese goods drop to 30%. Treasury Secretary Scott Bessent confirmed a 90-day pause in tariff hikes and ongoing discussions to further ease economic tensions between the two nations.
• Global pharmaceutical stocks tumbled Monday after Donald Trump announced plans to sign an executive order lowering U.S. drug prices, triggering investor fears of reduced profits. Novo Nordisk fell as much as 8.6% in Europe, while major Asian drugmakers like Chugai, Daiichi Sankyo, and Takeda saw sharp losses. The proposed move, targeting Medicare, Medicaid, and some hospitals, raises legal and feasibility concerns but still poses significant revenue risks for firms heavily reliant on U.S. sales. Analysts warn it could severely impact innovation and future drug development.
• On 13/05/2025, Chinese state media and social platforms are celebrating the recent trade deal with the U.S. as a major diplomatic win, crediting Beijing’s firm negotiating stance and retaliatory tariffs for forcing Washington to scale back most of its harsh import duties. The agreement—reached in Switzerland—reduces U.S. tariffs on Chinese goods from 145% to 30%, and Chinese tariffs on U.S. goods from 125% to 10%, alongside a 90-day tariff suspension. The move is being framed in China as proof that resilience and strategic resolve yield results, boosting nationalist sentiment and casting Beijing as a steady global trade partner despite longstanding concerns from international businesses over China’s follow-through on commitments.
• U.S. stocks soared on Monday after the U.S. and China struck a deal to slash tariffs and pause further hikes for 90 days, easing fears of a deepening trade war and potential recession. The Dow Jones jumped 1,160 points (2.81%) to 42,410.10, the S&P 500 rose 3.26% to 5,844.19 (now up over 20% from April’s low), and the Nasdaq gained 4.35% to 18,708.34, its best day in a month. Tech giants and China-reliant companies surged — Tesla rose 7%, Apple 6%, Nvidia 5%, while Amazon and Dell both jumped over 8%. Treasury Secretary Scott Bessent praised the “productive” talks in Switzerland and signaled more negotiations ahead, fueling optimism that a broader resolution may be within reach
• On 14/05/2025, U.S. inflation in April came in slightly below expectations, with the consumer price index rising 0.2% monthly and 2.3% annually, its lowest since February 2021, as Trump’s tariffs only began affecting the economy. Core CPI also rose 0.2% monthly and 2.8% annually. Shelter costs drove much of the increase, while food and used car prices declined. Markets were largely unmoved, but economists warn that tariff-related inflation pressures may build over summer. Trump’s recent 90-day tariff pause with China has eased some inflation fears, prompting traders to delay expectations for Federal Reserve rate cuts until September.
• Microsoft is laying off approximately 6,000 employees—about 3% of its global workforce—across all departments and regions, including nearly 2,000 at its Redmond headquarters, as part of broader organizational restructuring. Despite reporting strong quarterly earnings of $25.8 billion, the company is streamlining operations to adapt to market shifts and reduce management layers. These layoffs are not performance-related, unlike a smaller round in January. CEO Satya Nadella previously emphasized aligning sales strategies with AI-driven cloud growth, which has outpaced expectations. Microsoft’s stock recently closed at $449.26, nearing its all-time high.
• President Donald Trump praised Saudi Arabia after announcing a $600 billion investment commitment between the kingdom and the U.S., including a $142 billion defense deal and major tech collaborations. During a Riyadh investment forum, Trump also revealed plans to lift U.S. sanctions on Syria. Crown Prince Mohammed bin Salman pledged to expand the U.S.-Saudi partnership to $1 trillion, though economists question the feasibility given Saudi Arabia’s budget pressures. Notable investments include $20 billion from DataVolt in U.S. AI data centers and $80 billion from major firms like Google and Oracle for joint ventures.
• On 15/05/2025, Boeing and Qatar Airways have signed a record-breaking deal for up to 210 jets—the largest widebody aircraft order in Boeing’s history—including 130 Dreamliners and 30 777-9s, with options for 50 more. The agreement, reached during President Trump’s state visit to Qatar, also includes over 400 GE Aerospace engines, marking GE’s largest widebody engine deal. Valued at up to $96 billion by the White House, the deal is expected to support up to 400,000 U.S. jobs. This major boost comes as Boeing faces ongoing challenges from safety issues, trade tensions, and delays in 777X certification.
• Federal Reserve Chair Jerome Powell stated that long-term interest rates are likely to stay elevated due to ongoing economic shifts and more frequent supply shocks, making a return to near-zero rates unlikely. Speaking during a policy framework review, Powell emphasized the challenges of balancing inflation control and employment amid uncertain conditions, including potential tariff impacts. He noted that while inflation expectations align with the Fed’s 2% target, recent volatility necessitates a reassessment of how the Fed sets and communicates its goals. The review will build on the 2020 framework, which allowed inflation to run slightly above target but proved insufficient amid post-pandemic price surges.
• President Donald Trump praised Saudi Arabia after announcing $600 billion in investment commitments between the kingdom and the U.S., including a $142 billion defense deal and plans to lift U.S. sanctions on Syria. Speaking at a Riyadh investment forum alongside Crown Prince Mohammed bin Salman, Trump highlighted the expansion of U.S.-Saudi ties across defense, economic, and tech sectors, with the prince targeting a $1 trillion partnership. The deal includes a $20 billion AI data center investment in the U.S. by DataVolt and $80 billion in joint commitments from major tech firms. However, economists warn that Saudi Arabia may struggle to fulfill the pledge due to oil price volatility and domestic spending pressures.
• On 17/05/2025, Moody’s downgraded the U.S. sovereign credit rating from Aaa to Aa1, citing growing federal debt, rising interest costs, and lack of credible long-term fiscal planning. This move, aligning Moody’s with S&P and Fitch, may slightly raise Treasury yields and weaken investor sentiment toward U.S. assets. The downgrade reflects expectations that deficits will widen—reaching 9% of GDP by 2035—and debt will climb to 134% of GDP, driven by entitlement spending, low revenue, and possible extension of 2017 tax cuts. Markets reacted modestly, with Treasury yields and gold rising, and stocks and bond ETFs slipping.
• During a visit to the UAE, President Donald Trump announced that the U.S. and UAE have agreed on a path allowing Abu Dhabi to purchase advanced American AI semiconductors, likely referring to a preliminary deal for 500,000 Nvidia H100 chips annually. This would significantly boost the UAE’s AI infrastructure ambitions. The move may involve rescinding Biden-era export restrictions on AI chips, raising concerns among security experts about potential technology leakage to rivals like China. The announcement follows news of a joint U.S.-UAE plan to build a massive AI campus in Abu Dhabi, led by Emirati firm G42 and undisclosed U.S. tech partners.
• On 19/05/2025, Over four days last week, the U.S. Federal Reserve quietly purchased $43.6 billion in Treasurys—signaling a stealth return to quantitative easing rather than monetary tightening. This subtle shift has caught the attention of traders and is contributing to rising gold and bitcoin prices, both seen as hedges against central bank manipulation and fiat instability. China is also boosting gold imports, hinting at waning confidence in U.S. Treasurys and preparing for a global monetary shake-up. Meanwhile, institutional interest in bitcoin is rising, supported by ETFs and a new U.S. bitcoin reserve. Resource-rich markets like Brazil and Latin America are benefiting from a commodities boom fueled by a weaker dollar, with ETFs up around 24% this year. As central banks signal deeper shifts, gold, bitcoin, and emerging markets may offer strategic refuge and profit amid looming financial volatility.
• On 20/05/2025, U.S. Treasury yields remained elevated Monday after Moody’s downgraded the U.S. credit rating from Aaa to Aa1, citing growing debt and interest costs. The 30-year yield hit 5.03% before easing to 4.921%, while the 10-year rose to 4.459%. Despite initial market jitters, bond buying pushed yields down from their highs. Moody’s downgrade aligns with other major agencies and reflects concern over persistent fiscal deficits and a lack of bipartisan action to address them. This comes amid renewed deficit spending under Trump’s proposed tax and tariff policies, which analysts warn could worsen the U.S. fiscal outlook and raise doubts about Treasurys’ safe-haven status.
• On 21/05/2025, U.K. inflation rose to 3.5% in April, exceeding forecasts of 3.3% and reversing the recent cooling trend, with core inflation also up to 3.8%. Key price drivers included housing, transport, and utility costs, with water and sewerage charges seeing a record monthly hike. The rise, attributed to energy cap increases and one-off tax changes, adds pressure on households and complicates the Bank of England’s interest rate path. Though the BOE recently cut rates to 4.25%, higher-than-expected inflation may slow further cuts. Despite a strong Q1 GDP boost, economists expect slower growth ahead, while the overall inflation trend remains downward.
• Yields on Japan’s longest-dated government bonds surged to record highs following a weak 20-year debt auction, signaling waning investor demand and posing challenges for the Bank of Japan as it unwinds ultra-loose monetary policy. The 20-year yield jumped to 2.555%, while the 30- and 40-year yields hit 3.14% and 3.6%, respectively. Rising U.S. Treasury yields, concerns over Japan’s fiscal health, and reduced BOJ bond purchases have fueled volatility. Analysts warn of a potential bond market spiral without intervention, with calls growing for the BOJ to halt tapering of super-long bond purchases. Meanwhile, investors are reassessing yields in light of potential future rate hikes, as the BOJ’s policy rate remains at 0.5%.
• On 22/05/2025, Investor confidence took another hit as fears over the ballooning U.S. debt triggered a sharp market sell-off, just days after relief from tariff-related turmoil. Concerns stem from President Donald Trump’s proposed tax bill, projected to add $3–5 trillion to the national debt, prompting a spike in Treasury yields — with the 30-year hitting 5.085% and the 10-year reaching 4.607%. Higher yields suggest elevated borrowing costs and reduced stock appeal, leading to steep declines across major indexes, including a 1.91% drop in the Dow. Analysts warn the worsening fiscal outlook could drive further credit downgrades and market volatility.
• On 24/05/2025, President Donald Trump announced plans to impose a 50% tariff on European Union imports starting June 1, citing stalled trade negotiations and calling the EU “very difficult to deal with.” He stated he was not seeking a new deal, asserting the tariff decision as final. The move, which follows a threat to tariff Apple iPhones if not made in the U.S., triggered immediate drops in U.S. stock futures and a 2% fall in European markets. Treasury Secretary Scott Bessent said the tariff threat might prompt the EU to return with better proposals, though the White House later downplayed the announcement as nonbinding policy.
• President Donald Trump announced a proposed tariff of at least 25% on Apple iPhones manufactured outside the U.S., stating that he had previously told Apple CEO Tim Cook that iPhones sold in the U.S. should be made domestically. The threat, which could extend to other smartphone makers like Samsung, caused Apple shares to fall 3%. Trump’s comments come amid Apple’s shift of production to India and follow a recent White House meeting with Cook. Analysts warn that relocating iPhone production to the U.S. could more than triple retail prices. Treasury Secretary Scott Bessent framed the move as part of an effort to strengthen U.S. precision manufacturing and secure the semiconductor supply chain. Apple, facing $900 million in expected quarterly tariff costs, has invested heavily in U.S. infrastructure but declined to comment. The tariff threat coincides with broader trade tensions, including Trump’s call for a 50% tariff on EU imports.
• On 26/05/2025, President Donald Trump announced on May 26 that he has agreed to extend the deadline for imposing a 50% tariff on European Union imports to July 9, following a call from European Commission President Ursula von der Leyen. Trump had previously threatened the steep tariff for June 1, citing stalled trade negotiations, but granted the extension after von der Leyen requested more time to reach a deal. The move comes after Trump’s earlier implementation of 20% tariffs in April, later reduced to 10% for a 90-day period. Despite previously stating he was not seeking a deal, Trump now says it was his “privilege” to allow more time for talks, as both sides reaffirm the importance of their trade relationship.
• On 28/05/2025, U.S. President Donald Trump announced Tuesday that he is monitoring “positive” developments in trade talks with the European Union after delaying a planned 50% tariff on EU goods until July 9. He said the EU had reached out to schedule meetings, calling it a promising step following stalled negotiations. Market sentiment improved after his remarks, with European and U.S. stocks rising. The EU had previously faced a 20% tariff, later reduced to 10% for 90 days, and is considering countermeasures on $107 billion worth of U.S. imports if no deal is reached. While Trump has maintained a tough stance on the EU over trade imbalances, he has taken a more favorable view of the U.K., with a tentative trade deal already outlined.
• Businesses are increasingly leveraging the decades-old “first sale rule” to reduce tariff costs amid renewed trade tensions under President Trump. The rule, part of U.S. customs law since 1988, allows importers to calculate duties based on the original price paid to the manufacturer, bypassing intermediary markups. This strategy, revived during Trump’s first tariff wave in 2018 and now gaining traction again, is especially beneficial for high-margin sectors like luxury goods. Companies such as Moncler, Kuros Biosciences, and Traeger have cited it as a way to cut costs. However, applying the rule requires arm’s-length transactions, clear documentation, and trust between parties, as intermediaries may resist sharing pricing data. While legal, this workaround potentially undermines tariff objectives aimed at increasing domestic production and revenue.
• On 29/05/2025, A U.S. Court of International Trade ruling has blocked President Donald Trump’s broad reciprocal tariffs, finding they exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA). The court ruled that IEEPA doesn’t allow sweeping tariffs without congressional approval and found no legitimate link between the tariffs and Trump’s claims of a national emergency related to drug trafficking. This decision halts the tariffs permanently and prevents future modifications, although existing levies on steel and aluminum remain unaffected. The Trump administration is appealing the decision, potentially setting the stage for a Supreme Court battle. The ruling was praised by critics, including Oregon’s attorney general, as a win for consumers and businesses hurt by the tariffs, while the White House defended the measures as necessary for addressing trade imbalances.
• Surging long-dated yields in Japan’s bond market are raising alarms over a potential wave of capital repatriation and the unwinding of the carry trade, which could hit U.S. financial markets hard. Yields on 40-year Japanese government bonds recently hit a record 3.689% and remain elevated, with similar spikes seen in 30- and 20-year bonds. Analysts warn that as Japanese yields become more attractive, investors may shift capital back home, potentially draining U.S. markets—especially tech stocks—and strengthening the yen. This shift, driven partly by reduced Bank of Japan bond purchases and waning demand from domestic insurers, may also signal the erosion of U.S. market dominance. Strategists warn of global ripple effects, including tighter liquidity, higher borrowing costs, and weaker growth, as Japan—holding the world’s largest net external assets—redirects funds domestically.
• Elon Musk’s official role in the Trump administration has ended after reaching the 130-day annual limit for special government employees, concluding his tenure as head of the Department of Government Efficiency (DOGE). Musk, who thanked President Trump for the opportunity to reduce wasteful spending, had worked nearly full-time on the initiative since January, aiming to downsize federal operations. Though stepping back, Musk intends to continue contributing part-time and maintain a small White House office. He criticized a congressional spending bill for undermining DOGE’s efforts and now plans to refocus on his companies—Tesla, SpaceX, and xAI—amid mounting legal scrutiny over his government role. Meanwhile, Tesla investors are pressuring the board to require a minimum 40-hour weekly commitment from Musk before approving any new CEO compensation packages.
• On 30/05/2025, A federal appeals court temporarily paused a lower-court ruling that struck down most of former President Donald Trump’s tariffs, granting the Trump administration time to pursue an appeal. The U.S. Court of Appeals for the Federal Circuit issued the stay while it reviews the case, after the U.S. Court of International Trade had ruled that Trump exceeded his authority under the International Emergency Economic Powers Act. The Trump administration warned it would seek emergency relief from the Supreme Court if the pause wasn’t granted and is preparing alternative ways to reimpose tariffs if the appeal fails. The ruling disrupted Trump’s trade agenda and may weaken U.S. negotiating leverage, prompting both sides to prepare for a potential Supreme Court battle.
• President Donald Trump met with Federal Reserve Chair Jerome Powell on Thursday to discuss economic conditions, including growth, employment, and inflation, though Powell emphasized that monetary policy decisions would remain data-dependent and free from political influence. While Trump has repeatedly called for interest rate cuts, including during the meeting, Powell refrained from sharing policy expectations and reiterated the Fed’s commitment to objective analysis. This marked their first meeting since Trump began his second term, with the Fed expected to hold off on any rate changes until at least September amid ongoing tariff uncertainty and inflation concerns.
• On 31/05/2025, U.S. inflation remained subdued in April, with the personal consumption expenditures (PCE) price index rising just 0.1% monthly and 2.1% annually—its lowest in 2025—while core PCE rose 2.5% year-over-year. Tariffs imposed by President Trump earlier in the month had yet to impact consumer prices significantly, though economists warn that core goods inflation could rise later if tariffs persist. Consumer spending slowed to 0.2%, while the savings rate increased to 4.9%, and personal income jumped 0.8%. Despite calls from Trump for rate cuts, the Fed remains cautious, emphasizing data-driven, non-political decision-making amid ongoing tariff uncertainty.
• China has criticized the U.S. for imposing “discriminatory restrictions” on semiconductor exports, accusing it of violating a recent trade agreement, following President Trump’s claim that China breached the deal. The dispute highlights growing tensions over AI and advanced tech infrastructure. China urged the U.S. to reverse its export control measures, especially after bans on firms like Huawei and restrictions on Nvidia’s AI chips, which have cost Nvidia billions. While the Trump administration rescinded the Biden-era “AI diffusion rule,” tighter export controls continue, prompting concerns from U.S. firms that such policies may accelerate China’s efforts to build a self-reliant chip industry.