What You Missed Last Week - 6/2/2025

A weekly brief on things you might have missed

Russian Strategic Bomber “Cope Cage” Meme

United States

The Fed

The Federal Reserve’s May meeting minutes showed that Fed policymakers worry inflation could pick up again and that rising unemployment risks financial stability. They noted improving job growth but remain cautious as they weigh future rate moves.

U.S. Q1 GDP Revision

On May 29, the U.S. Bureau of Economic Analysis released its second estimate for first-quarter 2025 GDP, revising the contraction to –0.2 percent annualized, up from the initial –0.3 percent estimate. The revision reflects a smaller drag from consumer spending revised down slightly and a larger positive contribution from business investment. However, imports surged, subtracting 4.9 percentage points from growth, as companies front-loaded purchases ahead of steep tariffs introduced under the Trump administration’s “Liberation Day” trade policies.

Corporate profits also fell sharply, down $118.1 billion in Q1 versus a $204.7 billion increase in Q4 2024, largely due to rising import costs and tariff uncertainty. Consumer spending grew only 1.2 percent, its weakest pace in three years while government spending slowed and exports rose modestly. The PCE price index (inflation measure) was unrevised at a 3.6 percent annual increase, signaling persistent underlying inflation pressures despite some calming in input costs.

Tariffs

On May 30, President Trump announced he would raise steel and aluminum tariffs from 25% to 50% to protect U.S. jobs and boost domestic producers like U.S. Steel. However, on May 28, a U.S. trade court blocked most of Trump’s tariffs, ruling the president overstepped his authority under the Constitution. A federal appeals court then paused that ruling on May 29, temporarily keeping Trump’s broader tariffs in place while legal challenges continue.

China