Trump’s Economic Messaging Spooks CEOs. Why Are They Keeping Quiet?
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What are the key economic concerns discussed in this episode?
U.S. inflation rose less than expected in February, but tariffs are still looming. Plus, Canada and the EU impose retaliatory tariffs, and some may hit the U.S. where it hurts. And Trump's economic messaging is spooking CEOs. But in public, they're keeping their opinions to themselves.
CEOs are saying the stock market would have to fall by a lot for them to really say anything. And there was still a group of CEOs in those respondents who said they didn't feel like there was any sort of room for them to speak out right now.
It's Wednesday, March 12th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. New data from the Labor Department show that consumer prices were up 2.8 percent in February versus a year earlier. That's lower than the January gain of 3 percent and slightly lower than economists' expectations. For more on these numbers, I'm joined by WSJ economics reporter Justin Lehart. OK, Justin, we've been hearing so much about the economic impact of Trump's tariffs. Are they affecting these numbers?
Not yet. Most of the tariffs didn't go into effect until this month. We had some new ones out today, steel and aluminum. So obviously those aren't affecting anything. So it's sort of a wait and see when it comes to that.
Core inflation, which excludes food and energy prices, rose 3.1 percent in February. That's the lowest year-over-year reading since 2021. What does this mean for the Fed?
Core inflation is sort of a measure of the trend of inflation. So the good news is that did cool. The Fed actually follows a different measure of inflation from the Commerce Department. And there was sort of some bad news in the number today. A lot of the decline that year-over-year core reading was due to a drop in the airline prices. So the expectations on the Fed – They're not going to be cutting until June, investors don't think. And the danger is they may not even cut then. It really depends on how the data progresses in the months ahead, both for inflation and then for the economy at large. It's comforting to see sort of that headline. But once you dig in, it's not as happy as you might have thought.
That was economics reporter Justin Layhart. Thank you, Justin.
Thanks.
Canada retaliated against the Trump administration's tariffs on steel and aluminum, saying it would impose an additional levy on more than $20.5 billion in goods imported from the U.S. Canada's finance minister, Dominic LeBlanc, said that the tariffs will target U.S. steel products worth about $9 billion, aluminum products worth $2 billion, and other U.S. imports, including computers and sports equipment. Meanwhile, as we mentioned in this morning's show, the European Union plans to impose retaliatory tariffs on a range of American goods. In the Oval Office earlier today, President Trump said that, quote, of course he would respond to the EU tariffs. The European tariffs, which include 50 percent levies on goods like American whiskey, motorcycles, and motorboats, are in response to U.S. steel and aluminum tariffs that took effect overnight. Our correspondent Kim McRaehl joins me now from Brussels. So, Kim, break it down for us. How exactly would these tariffs work?
The tariffs that they've talked about would basically come into effect in two sets. The first set would come April 1st and the next would come in mid-April. Worth flagging that for all of this, the EU has really emphasized the idea that if there was any way of coming to a deal with the US to avert the steel and aluminum tariffs that the US imposed, they could not impose these retaliatory tariffs or they could take them away later on.
I mentioned a couple of the goods that are up for discussion here, but are there any others that jumped out at you from the list?
The EU has tried in producing this list to come up with products that will have a maximum influence and potentially maximum pain for the United States while minimizing the impact and the pain for Europeans. And so a lot of them focus on, in some cases, Republican states, in some cases, products that they think that Europeans can find elsewhere from other countries.
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