Policy uncertainty = weaker investment & slower growth
The World Trade Organization (WTO) has significantly downgraded its 2025 global trade forecast, citing intensifying trade tensions as the key factor.
- Global trade to fall 0.2%, down from +2.7% forecast
- US-China trade may drop by 80%
- Global GDP cut to +2.2%, risk of +1.7% with full tariffs
- North America worst hit: -12.6% exports, -9.6% imports
- Services trade to stay below trend
The WTO’s latest outlook highlights the growing risks of protectionist trade policies - and the potential for widespread global economic disruption if current trends continue.
Federal Reserve Chairman Jerome Powell said the economy is veering away from the central bank's objectives of keeping inflation contained and the labor market strong, a trend he expects to persist through the remainder of 2025. Speaking at the Economic Club of Chicago on Wednesday, he said trade policies could put the Fed's goals of taming inflation and maintaining economic growth in "tension." Stocks fell on the news. Powell also said that maintaining a strong labor market depends on stabilizing prices.
In recent months, economic indicators have begun flashing warning signs, suggesting that the United States may be more vulnerable to a recession now than at any other time since the height of the COVID-19 pandemic. While the nation has shown remarkable resilience in recovering from the unprecedented disruptions caused by the global health crisis, mounting pressures are raising concerns among economists and policymakers alike.
Several factors contribute to this growing unease. First, inflation remains persistently high, eroding consumer purchasing power and forcing the Federal Reserve to maintain higher interest rates for an extended period. This monetary tightening, while necessary to combat rising prices, has slowed economic growth and increased borrowing costs for businesses and households. As a result, industries such as housing and manufacturing have already experienced significant slowdowns.
Additionally, geopolitical uncertainties continue to weigh on global markets. Ongoing conflicts, trade tensions, and supply chain disruptions have created an environment of volatility that threatens to spill over into the domestic economy. These external pressures, combined with weakening consumer confidence, paint a troubling picture for the months ahead.
The labor market, often seen as a bright spot in the recovery, is also showing signs of strain. Job growth has moderated, and layoffs in certain sectors—particularly technology and finance—are becoming more frequent. Although unemployment remains low by historical standards, there are fears that this trend could reverse if businesses face further financial headwinds.
Perhaps most concerning is the lack of clear solutions to these interconnected challenges. Policymakers must strike a delicate balance between addressing inflation without stifling growth entirely. Yet, with political divisions deepening and fiscal tools limited by growing national debt, finding consensus on effective measures will be no easy task.
While it’s important not to overstate the likelihood of an imminent downturn, the risks are undeniable. For millions of Americans who endured the hardships of the pandemic-era recession, the prospect of another economic contraction is daunting. It underscores the need for vigilance, prudent planning, and a renewed focus on policies that can bolster long-term stability.
As we move further into 2025, all eyes will remain on key economic metrics and the steps taken by leaders to navigate these uncertain times. Whether the U.S. can sidestep a recession or mitigate its impact will depend largely on how effectively these challenges are addressed—and how quickly.
They're some of the fastest-growing jobs available, but not everyone knows they exist, The Wall Street Journal argues. Radiation-therapist and nuclear-technician roles don't always require a college degree, but with the right tech skills, they can earn six figures. Last year saw more than 6 million job openings like these, but 72% were in occupations with labor shortages, per one analysis. The solution could lie in training programs that feed directly to employers.
This Wall Street Journal story examines a fascinating and fundamental question: Why is there such a mismatch in the U.S. between job seekers and employers?
It turns out that a big reason is that most of us don't even know that many careers even exist -- or what skills we would need to do them. We tend to pursue jobs we see around us or rely on advice from family and friends.
Lauren Weber explores the issue by looking at middle-skills roles -- those that don't require a college degree but require some tech-infused skills. Think of radiation therapists and air-traffic controllers.
“I had never heard of this job,” said one of the women who went through a community college training program and now makes $34 an hour sterilizing surgical instruments in a hospital. That's double what she earned as a child-care aide, and it took less than a year of classroom training.
We have a fragmented supply-and-demand situation without a good structure. Often, the supply finds the training opportunity through luck, Google, or a mentor. This article is right to bring light to a problem ripe for an innovative solution. We need “a coordinated career-navigation system,” said Robert Espinoza, chief executive of the National Skills Coalition. I couldn't agree more!
You define your career, not others.
Working in a niche area of an industry can springboard you to other opportunities. That so-called "low-level, meaningless" job can have a huge impact on an organization.
Reflecting on a fascinating read from the Wall Street Journal about the surprisingly complex dynamics of career paths.
"Career decisions—some of the most critical choices of people’s lives—often come down to a haphazard mix of initiative, luck, coincidence, and connections."
It's a humbling reminder that while hard work and proactive steps are crucial, the journey isn't always a linear one. Sometimes, it's the unexpected encounters, a stroke of good fortune, or the strength of our network that truly opens doors.
This makes me think about the importance of:
- Cultivating genuine connections: You never know where a meaningful relationship might lead.
- Staying open to unexpected opportunities: Be ready to pivot and explore paths you hadn't initially considered.
- Recognizing the role of chance: While we can't control everything, we can position ourselves to capitalize on opportunities when they arise.
The Federal Reserve can stay patient and wait to see how tariffs and other economic policies of the Trump administration play out before making any changes to interest rates, Chair Jerome Powell said Wednesday.
“As that great Chicagoan Ferris Bueller once noted, ‘Life moves pretty fast,’” Powell said in a speech to the Economic Club of Chicago. “For the time being, we are well-positioned to wait for greater clarity” on the impact of policy changes in areas such as immigration, taxation, regulation, and tariffs, Powell said.
The sharp volatility in financial markets since President Donald Trump announced sweeping tariffs April 2, only to put most of them on hold a week later, has led to speculation about whether the Fed would soon cut its key interest rate or take other steps to calm investors. Yet the Fed is unlikely to intervene unless there is a breakdown in the market for Treasury securities or other malfunctions, economists say.
Stocks fell further after Powell’s remarks. The broad S&P 500 index dropped more than 2% in afternoon trading.
In his prepared remarks, Powell reiterated that the Trump administration’s tariffs are “significantly larger than anticipated.”
“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said.
Powell also said that the Fed could face threats to both of the mandates it’s been given by Congress: To achieve maximum employment and maintain stable prices. Should both inflation and unemployment rise, that would be a “challenging scenario,” he said, because the Fed would essentially have to choose whether to keep interest rates high to fight inflation or cut them to spur growth and hiring.
“Our tool only does one of those two things at the same time,” he said in a question-and-answer session.
Powell and many Fed officials have signaled previously that they are more concerned about tariffs pushing inflation higher than their potential hit to growth. That would mean that even if the economy weakened, the Fed might keep rates elevated to combat inflation.
Powell said the inflation from tariffs will likely be temporary, but “could also be more persistent,” echoing a concern expressed by a majority of the Fed’s 19-member interest rate-setting committee in the minutes of their meeting last month.
Yet some splits among the Fed’s interest rate-setting committee have emerged. On Monday, Fed governor Christopher Waller said that he expects the impact of even a large increase in tariffs to be temporary, even if they are left in place for several years. At the same time, he also expects such large duties would weigh on the economy and even threaten a recession.
Should the economy slow sharply, even if inflation remained elevated, Waller said he would support cutting interest rates “sooner, and to a greater extent than I had previously thought.”
But other Fed officials, including Neel Kashkari, president of the Fed’s Minneapolis branch, have said they are more focused on fighting the effects of higher tariffs on inflation, suggesting they are less likely to support rate cuts anytime soon.
For now, most recent reports suggest the economy is in solid shape. Hiring has been solid, and inflation cooled in March. Yet measures of consumer and business confidence have plunged, raising concerns among economists that spending and business investment could weaken.
Powell said he shared those concerns. He said that the increase in tariffs was so large and there is so much uncertainty surrounding the administration’s next moves that it could cause companies to become more cautious about spending.
“These are very fundamental changes in long-held... policies in the United States,” he said. “The Smoot-Hawley tariffs were actually not this large, and they were 95 years ago. So there isn’t a modern experience of how to think about this.” The Smoot-Hawley tariff in 1930 has been blamed for worsening the Great Depression.
If the uncertainty persists, Powell said, “that would weigh on ... investment, just in general.”
Head Start centers across the U.S. have received nearly $1 billion less in federal money compared with this time last year, and a lag in funding this week has caused some preschool classrooms for low-income children to close.
The federal government has distributed $1.6 billion for Head Start from Jan. 1 through Tuesday, compared with $2.55 billion issued during the same period last year, according to the office of Sen. Patty Murray, D-Wash...., which has been analyzing a federal database. Murray said the Trump administration had “slow-walked” funding appropriated by Congress.
Head Start, a child development program for more than half a million of the nation’s neediest kids, is federally funded, but runs through private and public schools.
The preschools are deeply reliant on the federal money they receive. On Wednesday, a delay in funding closed Head Start classrooms serving more than 400 children at Inspire Development Centers in Sunnyside, Washington. More than 70 staff have been laid off, and the center’s leaders don’t plan to reopen the classrooms until they receive federal money, Inspire CEO Jorge Castillo said.
The lag in funding is the latest barrier Head Start preschools have faced under the Trump administration. During the brief freeze on federal grants after President Donald Trump took office, Head Start providers were unable to access their accounts. Unable to make payroll that day, several centers temporarily closed, cutting off free child care for low-income families, for whom a day without work is often a day without pay.
Then, this month, scores of federal Head Start employees were put on leave as part of Trump’s efforts to shrink the federal government. At least five of the 12 regional offices for Head Start were closed as part of layoffs at the Department of Health and Human Services, according to the National Head Start Association.
Advocates had warned that the layoffs could slow funding to Head Start providers, who are typically in touch with federal staff to receive their annual grants to operate a preschool. The Inspire centers typically receive annual notice of their funding amount in February, Castillo said, with a finalized award by May 1. But this year, the company has not heard from the Department of Health and Human Services.
A spokesperson for the department did not respond to a request for comment.
“If you eliminate the regional offices, you are going to slow down grant processing, and, sure enough, they did. What Sunnyside is experiencing is not only predictable, it’s probable,” said Joel Ryan, executive director of the Washington State Association of Head Start. “The parents don’t have child care today. And those kids are missing out on programming.”
Head Start was started six decades ago as part of President Lyndon B. Johnson’s War on Poverty. While the early childhood program has enjoyed bipartisan support since then, some Republicans have emphasized its shortcomings and criticized efforts to increase funding. And Project 2025, the policy blueprint created by the conservative Heritage Foundation, called for eliminating Head Start altogether.
“As he works to give more tax breaks to billionaires like himself, Donald Trump is doing everything he can to destroy Head Start— without a care in the world for the hundreds of thousands of working families across the country who depend on it,” said Sen. Patty Murray, D-Wash., in a statement. “We are beginning to see the devastating consequences: centers closing, kids kicked out of the classroom, teachers losing their jobs, and entire communities losing out.”
Closing the central Washington Head Start centers means families will lose access to high-quality, free preschool, plus health checks, nutritional programs and interventions for developmental delays, Castillo said.
“And then we’re not even talking about children with learning disabilities, with physical disabilities or considered ... homeless. This is devastating,” Castillo said.
The showdown between the Trump administration and Harvard University is spotlighting bare-knuckled politics and big dollar figures. But in the battle of the moment, it’s easy to lose sight of a decades-long alliance between the U.S. government and the nation’s most prominent universities, forged to fight a world war.
For more than 80 years, that interdependence has been prized by academic leaders and politicians of both parties as a paragon for American discovery and innovation.
“In some ways, I think it’s a core part of the story of contemporary America,” said Jason Owen-Smith, a University of Michigan professor who studies the scope of research on the nation’s campuses. “Harvard’s an exemplar, but it’s not the only one.”
That explains the more than $2 billion in multi-year grants and contracts to Harvard frozen this week by administration officials after the school defied their demands to limit activism on campus.
A link that dates to World War II
The grants are testament to a system that has its roots in the early 1940s, when the U.S. government began securing cutting edge research through a singular partnership. Federal officials provided money and oversight; institutions, led by big state and private universities, used those billions of dollars to plumb the unknowns of science and technology, while training new generations of researchers.
The partnership delivered wartime innovations including the development of radar at the Massachusetts Institute of Technology and, decades later, the birth at Stanford University of what became Google.
Now the Trump administration is trying something many other chief executives have avoided: imposing ideology on a partnership that has long balanced accountability with independence.
“A lot of Americans are wondering why their tax dollars are going to these universities when they are not only indoctrinating our nation’s students, but also allowing such egregious illegal behavior to occur,” White House press secretary Karoline Leavitt said during a briefing with reporters this week.
But longtime observers of the partnership between government and universities see the administration’s actions very differently.
“It’s never been politicized the way the Trump administration is doing it because it’s always had bipartisan support,” says Roger Geiger, a historian of higher education who is retired from Penn State. “It’s unusual that we don’t see that support now.”
Cutting off Harvard follows similar moves at Columbia and other prominent universities to force compliance. At the same time, Johns Hopkins University surrendered more than $800 million in federal grants for health and medical programs after the administration began dismantling the U.S. Agency for International Development and cut funding by the National Institutes of Health.
Behind the dollar figures
The dollar figures for use in domestic laboratories and programs overseas might seem surprising to a public most familiar with big universities as centers of teaching and student life.
But to make sense of the current battle, it helps to understand how government and universities came to be so interdependent.
A century ago, a much smaller community of research universities relied largely on private funding. But as U.S. officials scrambled to prepare for entry into World War II in 1940, a former MIT dean, Vannevar Bush, pitched President Franklin D. Roosevelt on the critical need to marshal defense research by partnering the government with scientists at universities and other institutions.
“Urgency in the 1940s was really the overriding motivation,” said G. Pascal Zachary, author of a biography of Bush. “But the structure proved durable.”
Bush’s agency oversaw the quest for the first nuclear weapons, developed at a laboratory administered by the University of California. And when fighting ended, he prevailed on Roosevelt to expand the research partnership to ensure national security, foster scientific and medical discovery, and grow the economy.
“It is only the colleges, universities, and a few research institutes that devote most of their research efforts to expanding the frontiers of knowledge,” Bush wrote in a 1945 report to Roosevelt, laying out his plan.
Federal funding for research remained limited, however, until the Soviet Union launched the first artificial satellite in 1957. Determined to catch up, U.S. lawmakers approved a stream of funding for university research and training of new scientists.
“We were locked into the Cold War, this battle with the Soviet Union, that was in many ways a scientific and technological battle,” said Jonathan Zimmerman, an education historian at the University of Pennsylvania.
Research schools, which number between 150 and 200, used the inflow of federal dollars to build labs and other infrastructure. That growth came as enrollment climbed, with the government paying for veterans to attend college through the G.I. Bill and measures in the 1960s to help poorer students.
Scratchiness has been part of the relationship from the outset
The partnership between government and universities has always come with a built-in tension.
Federal officials are at the helm, awarding money to projects that meet their priorities and tracking the results. But it is explicit that government officials do not control the work itself, allowing researchers to independently pursue answers to questions and problems, even if they don’t always find them.
“The government gets to basically treat a generally decentralized national system of universities as a pay-as-you-go resource to get problems solved,” Michigan’s Owen-Smith said.
With that understanding, universities have become the recipients of about 90 percent of all federal research spending, taking in $59.6 billion in 2023, according to the National Center for Science and Engineering Statistics.
That accounts for more than half the $109 billion spent on research at universities, with most of the rest coming from the schools themselves, state and local governments, and nonprofits.
Johns Hopkins has been the single largest grantee, accounting for $3.3 billion in federal spending in 2023. Federal dollars for research at the University of Washington, Georgia Institute of Technology, UC San Diego, and Michigan also exceeded more than $1 billion each. Harvard received about $640 million.
Moves by the Trump administration to close agencies and impose changes on campuses present universities with an unprecedented threat.
“Generations of Hopkins researchers have brought the benefits of discovery to the world,” the school’s president, Ronald J. Daniels, wrote recently. “However, a fast and far-reaching cascade of cuts to federal research funding across higher education is badly fraying this long-standing compact.”
The partnership is supposed to be protected by guardrails. Rules specify that officials who believe a school is violating the law can’t just cut funding but must instead present details of alleged violations to Congress.
But the Trump administration, bent on making schools change policies designed to encourage diversity on campuses and crack down on protests, is ignoring those rules, Zimmerman said.
Funding cuts will likely put pressure on schools’ remaining resources, leaving them with less money for things like financial aid to students of modest means, he said. But the bigger danger is to the academic freedom of schools to teach and do research as they see fit.
“Let’s remember that in the past three months we’ve seen people” at universities “scrubbing their websites for references to certain words,” he said. “That’s what happens in authoritarian countries.”
