Under the headline “Powell’s Message To Congress: Rate Cut Is Likely Coming Soon,” the AP (7/10, Crutsinger) reported that Federal Reserve Chairman Jerome Powell, in the Fed’s semiannual report to Congress, “point[ed] to a weaker global economy, rising trade tensions and chronically low inflation,” and “signaled Wednesday that the Federal Reserve is likely to cut interest rates late this month for the first time in a decade.” Powell “said that since Fed officials met last month, ‘uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.’” The AP added that “in addition, inflation has dipped further below the Fed’s annual target level.”
The New York Times (7/10, Smialek, Phillips) reported that Powell, testifying before the House Financial Services Committee, “said risks to the United States economy remain, including President Trump’s trade war and global economic weakness, suggesting a cut may be more likely than not when the Fed meets again later this month.” The Washington Post (7/10, Long) also reported that Powell “hinted strongly...that a cut is likely to happen this month.” Along similar lines, Reuters (7/10, Schneider, Hunnicutt) said Powell “set the stage for the first US interest rate cut in a decade later this month,” and Bloomberg (7/10, Torres, Condon) quoted him as saying, “manufacturing, trade and investment are weak all around the world.”
A New Small Business Burden
The Wall Street Journal Editorial Board writes on the Corporate Transparency Act, which will require corporations or limited liability companies of fewer than 20 employees or $5 million or less in revenue to disclose details about their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network. NFIB calls the legislation a real threat to more than 5 million small business owners in America.
Small Business Optimism Reverses Last Month’s Gain as Uncertainty Rises
America’s small business owners’ optimism took a modest downturn in June, slipping 1.7 points to 103.3.
NFIB: Supreme Court Missed Opportunity to Provide Small Businesses Regulatory Certainty in Kisor v. Wilkie
NFIB filed an amicus brief in Kisor v. Wilkie, arguing that Auer deference is an unconstitutional violation of the separation of powers between the executive and judiciary branches. NFIB is disappointed in the United States Supreme Court’s decision.
CBO Scoring Warns of Damaging Effects Raise the Wage Act will have on Small Business Economy
NFIB released a statement in response to the nonpartisan Congressional Budget Office’s report, which estimates that the Raise the Wage Act would result in a median estimate of 1.3 million lost jobs and $9 billion in total income lost in 2025.
PYMNTS (7/10) reported that small business owners “aren’t necessarily jumping for joy” over recent data showing the labor market remains strong, as entrepreneurs often struggle to find adequate staffing to expand as wages increase in the marketplace. ADP Research Institute Vice President Ahu Yildirmaz said in a recent statement, “While large businesses continue to do well, small businesses are struggling as they compete with the ongoing tight labor market.” According to ADP data, “small businesses with fewer than 50 employees saw a decline in open job positions by 23,000; even smaller companies – those with 19 or fewer employees – saw payrolls decline by 37,000” in June.
WPost Analysis: Trump And Pelosi Under Pressure To Reach Budget And Trade Deals
The Washington Post (7/10, A1, Paletta, Werner) said President Trump and House Speaker Pelosi “have entered one of the most perilous stretches of their fraught relationship, and a miscalculation could lead to a government shutdown, debt default and a derailed trade deal that is a key White House priority.” However, the Post says “relations have become so embittered that the White House has had to dispatch Treasury Secretary Steven Mnuchin, who has few friends in the Democratic caucus, to try to broker an agreement.” According to the Post, “The one bright spot had appeared to be her respect for [USTR] Lighthizer, who had spent more than a year carefully cultivating ties with top Democrats in a push to revamp the North American Free Trade Agreement.” However, “even that effort is now under extreme strain, as labor unions and vocal Democrats are demanding major changes that might be politically infeasible.”
NYTimes Analysis: Trump Tariffs Have Benefited Several US Industries
According to a New York Times (7/10, Eavis) analysis, “President Trump’s trade policies have helped American steel, aluminum, lumber, solar and washing-machine businesses, but not as much as they might have hoped.” The Times said the tariffs are “making some products more expensive for consumers,” but, at the same time, “the American companies who sought them are investing in production and hiring workers.” The Times says the companies also “say they are more optimistic.” However, the Times adds that “not everything has gone to plan,” and “there are signs that some of the companies have expanded too fast,” which has meant that “the prices of their products are falling.”
Study Shows Financial Volatility Of Gig Workers
PYMNTS (7/12) reported that, according to recent research conducted by Mastercard and PYMNTS, of the “38.7 percent of the U.S. workforce engaged in the gig economy – particularly the 13.3 percent who live paycheck to paycheck and have no savings for emergencies – income instability and unpredictability create serious cash flow challenges.”