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Exxon Mobil and Chevron are jumping into the race to power AI data centers.
Exxon plans to build a natural gas plant to power a data center and use carbon capture technology to slash the plant’s emissions.
Exxon CEO Darren Woods said decarbonized natural gas plants are a quicker solution to the tech industry’s power needs than nuclear.

Budrul Chukrut | Lightrocket | Getty Images

Exxon Mobil and Chevron are jumping into the race to power artificial intelligence data centers, as the two oil majors bet tech companies will ultimately turn to natural gas to meet their tremendous energy needs.
Exxon unveiled plans this week to build a natural gas plant to power a data center. The oil major says it would then use carbon capture and storage technology to reduce the emissions of the plant by 90%.

“We’re working with other large cap industrials to rapidly deploy a solution that would provide both high reliability and low carbon intensity power to meet the growing demand for computing power for artificial intelligence,” Exxon Chief Financial Officer Kathryn Mikells told Wall Street analysts Wednesday without disclosing names of the companies’ the oil major is working with on the project.
The gas plant would not rely on the electric grid and would be independent of utilities, allowing faster installation than traditional power generation projects, Mikells said. Exxon has not disclosed a customer or a timeline for the project.
Exxon has invested heavily in building a carbon capture network along the Gulf Coast with more than 900 miles of pipeline to transport CO2 from several industrial customers to permanent storage sites. The oil major estimates decarbonizing AI data centers could represent up to 20% of its total addressable market for carbon capture and storage by 2050.
Chevron is also working on ways to power data centers, said Jeff Gustavson, president of the oil company’s new energy business, at the Reuters NEXT conference on Wednesday.
“This is something that our company is very well positioned to participate in,” Gustavson said. Chevron is a major national gas producer with power generation equipment and very large tracts of land that could be used for data centers, the executive said.

Gas over nuclear

Alphabet, Amazon, Microsoft and Meta have primarily bought wind and solar power for their data centers as they seek to mitigate the impact of their businesses on the climate. But the power needs of artificial intelligence are growing so large that the tech companies are searching for sources of electricity that are more reliable than renewable energy.
The tech companies have shown a growing interest in nuclear power as a consequence. Microsoft is helping to bring the Three Mile Island nuclear reactor back online by purchasing power from the plant. Amazon and Alphabet’s Google unit are investing in next-generation, small nuclear reactors. Meta recently called on companies to send it proposals to build new nuclear plants.
But the fossil fuel industry and energy analysts have argued for months that the tech sector will ultimately have to embrace natural gas because nuclear plants simply take too long to build.
Exxon CEO Darren Woods took a swipe at nuclear power Wednesday and claimed his company is better positioned than any in the U.S. to meet the power needs of AI in the immediate and near term.
“If you’re betting on nuclear and something coming down the road, there’s a long road ahead of us,” Woods told Wall Street analysts on Wednesday. The small nuclear reactors that tech companies are investing are not expected to reach commercialization until the 2030s.
Exxon is not looking to start a power generation business, the CEO said. The company plans use its expertise leading large projects to help install power generation for data centers in the early stages of the AI ramp up, Woods said.
Once the early ramp up is done, Exxon will focus on trapping and storing emissions associated with data centers, and supplying decarbonized natural gas to the power plants that run AI, Woods said.

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MicroStrategy, which has become a play on bitcoin, will be joining the Nasdaq 100 index, effective Dec. 23.
Exchange-traded funds that follow the index – including the popular Invesco QQQ Trust – will become automatic buyers of the stock.
Shares of MicroStrategy have soared more than 500% in 2024.

MicroStrategy founder Michael Saylor speaks at the Bitcoin 2021 Conference in Miami on June 4, 2021.
CFOTO | Nurphoto | Getty Images

MicroStrategy, the preferred high beta play on the price of bitcoin, will join the Nasdaq 100 index, a move that could further increase demand for the controversial stock that has been on a torrid run this year alongside the price of the cryptocurrency.
The Nasdaq 100 comprises 100 of the largest nonfinancial companies in the tech-focused Nasdaq Composite index. A stock’s addition means that ETFs – including the highly popular Invesco QQQ Trust, which has $325 billion in assets – will become automatic buyers as well.

Shares of the bitcoin proxy could be set to gain off the move. They’re up more than sixfold this year, compared with bitcoin’s nearly 140% gain in the same period.
The change, which will become effective before the market open on Dec. 23, was announced Friday after the stock market close. MicroStrategy was widely telegraphed as a potential contender for membership by investors who were looking forward to the index’s rebalancing this week.
“This would lead to inclusion of MSTR in some of the largest ETFs such as QQQ (5th largest ETF) etc, leading to one-time fresh buying … and ongoing participation in future inflows,” said Gautam Chhugani, an analyst at Bernstein, in a note this week ahead of the reshuffle.
Additionally, “the market will likely set its sight on S&P 500 inclusion for 2025,” Chhugani said. “Currently, due to profitability of its software business, it may be challenging to be considered for S&P 500 inclusion.”
The Nasdaq changes the constitution of the Nasdaq 100 index annually. The companies selected for inclusion are based largely on market cap rankings on the last trading day of November, which was Nov. 29 this year. Stocks must also meet eligibility requirements around liquidity and the free float percentage of their shares.

MicroStrategy originally sold enterprise software, but the firm has increasingly become a bitcoin holding company. It first added bitcoin to its balance sheet in 2020, with Michael Saylor as CEO at the time, and has been leaning into that strategy in the years since. MicroStrategy now issues convertible notes to leverage its purchases, and its stock’s daily trading sometimes looks like a more volatile version of bitcoin.
The company now has a market cap of roughly $90 billion despite having less than $500 million in revenue over its previous four quarters, according to FactSet. Saylor told CNBC’s “Squawk Box” earlier this month that he sees the company’s role as “securitizing bitcoin.”
“Primarily, our job is to bridge the traditional capital markets that want bonds, or they want fixed income, or they want equity, or they want options, and we plug that into the crypto economy. And we use bitcoin as the vehicle to do that,” said Saylor, who is now the company’s executive chairman.
MicroStrategy began cranking up its purchases after the U.S. presidential election. The victory of pro-crypto President-elect Donald Trump — specifically his promise to establish a national strategic bitcoin stockpile — has propelled bitcoin to new all-time highs, achieved in part by the company’s purchases. MicroStrategy now owns 423,650 bitcoins. It bought 149,880 of them in four different purchases over the past month, beginning Nov. 11.
As part of MicroStrategy’s hot streak this year, activists have been pushing bitcoin investing as an agenda item in shareholder meetings at companies like Microsoft and Amazon. Mining stocks like Mara Holdings have also begun employing Saylor’s bitcoin yield strategy.
Palantir Technologies and Axon Enterprise will also be joining the Nasdaq 100 later this month. Illumina, Moderna and Super Micro Computer will be removed from the index.
Last year, the Nasdaq 100 added six companies in its annual reconstitution, including DoorDash. Five of those six stocks rose the Monday after the announcement, with an average move of 1.21%.
—With reporting by Jesse Pound.

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If you’re considering a Roth individual retirement account conversion, your tax bracket could help you decide whether the move makes sense.
Before completing the transfer, you need to know how long it will take to break even on upfront taxes, based on your long-term goals.
You should also weigh other financial planning opportunities in lower-income years, experts say.

Eleganza | E+ | Getty Images

The best tax brackets for Roth conversions

When crunching the numbers for a Roth conversion, you’ll want to consider how the transfer impacts your current tax bracket, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
If you can stay within the 12% tax bracket or lower, “that’s a no-brainer, 99% of the time,” he said. But anything above the 12% is “situational,” depending on a client’s goals and other factors. 

Ryan Losi, a certified public accountant and executive vice president of CPA firm Piascik, also uses a “rule of thumb” to greenlight Roth conversions.
“If we can convert and still stay in the 24% bracket or lower, I’m a thumbs up,” he said. But bumping into the 32% bracket or higher prolongs the “recovery period” to recoup upfront taxes. 
Of course, these benchmarks can change depending on a client’s unique circumstances, such as estate planning goals, experts say. 

Weigh rebalancing in lower-income years

When completing a Roth conversion, advisors typically aim to fill a specific tax bracket with income without spilling into the next one.
But you could miss other planning opportunities by focusing solely on Roth conversions, Lucas said.
For example, if you’re sitting on a large brokerage account with sizable gains, you could leverage your lower tax brackets to rebalance your portfolio, he said.
The strategy, known as “tax gain harvesting” involves strategically selling profitable assets during lower-income years.
For 2024, you may qualify for the 0% long-term capital gains rate with a taxable income of up to $47,025 if you’re a single filer or up to $94,050 for married couples filing jointly. 
These figures would include assets sold from your brokerage account. More

The Federal Reserve is likely to cut interest rates for the third time when it meets next week.
Consumers could see some of their borrowing costs come down as well.
From credit cards to car loans and mortgages, here’s a breakdown of what to expect as the Fed trims its benchmark.

The Federal Reserve is expected to lower interest rates by another quarter point on Dec. 18 at the end of its two-day meeting. That would mark the third rate cut in a row — all together shaving a full percentage point off the federal funds rate since September.
So far, the central bank has moved slowly as they recalibrate policy after swiftly hiking rates when inflation hit a 40-year high.

“This could be the last cut for a while,” said Jacob Channel, senior economic analyst at LendingTree.
The Fed might choose to take “a wait-and-see approach” because there is some uncertainty around President-elect Donald Trump’s fiscal policy when he begins his second term, Channel said.
In the meantime, high interest rates have affected all sorts of consumer borrowing costs, from auto loans to credit cards. 
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The federal funds rate, which the U.S. central bank sets, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates consumers see every day.

A December cut could lower the Fed’s overnight borrowing rate by a quarter percentage point, or 25 basis points, to a range of between 4.25% and 4.50% from its current range of between 4.50% and 4.75%. 
That “will exert some margin of easing of financial pressure,” said Brett House, economics professor at Columbia Business School, but not across the board.
“Some of the most important interest rates that people face don’t benchmark off the Fed rate,” he said.
From credit cards to car loans to mortgages, here’s a breakdown of how it works:

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to 20.25% today, according to Bankrate — near an all-time high.
Even though the central bank started cutting interest rates in September, the average credit card interest rate has barely budged. Card issuers are often slower to respond to Fed decreases than to increases, said Greg McBride, Bankrate’s chief financial analyst.
“The rate will go a step lower but with a lag up to three months,” McBride said.
A better move for those with credit card debt is to switch to a 0% balance transfer credit card and aggressively pay down the balance, he said.
“Interest rates are not going to fall fast enough to do the heavy lifting for debt-burdened consumers,” he said.

Mortgage rates

Because 15- and 30-year mortgage rates are fixed and mostly tied to Treasury yields and the economy, they are not falling in step with Fed policy. And since most people have fixed-rate mortgages, their rate won’t change unless they refinance or sell their current home and buy another property. 
As of the week ending Dec. 6, the average rate for a 30-year, fixed-rate mortgage is 6.67%, according to the Mortgage Bankers Association.
Those rates are down somewhat from the previous month, but well above the 2024 low of 6.08% in late September.
“Going forward, mortgage rates will likely continue to fluctuate on a week-to-week basis and it’s impossible to say for certain where they’ll end up,” Channel said.

Auto loans

Auto loans are fixed. However, payments have been getting bigger because car prices are rising and that has resulted in less-affordable monthly payments.
The average rate on a five-year new car loan is now around 7.59%, according to Bankrate.
While anyone planning to finance a new car could benefit from lower rates to come, the Fed’s next move will not have any material effect on what you get, said Bankrate’s McBride. “Sticker prices are high and the amounts being financed by borrowers are very, very high,” he said — around $40,000, on average.
“Even at very low rates, that is a budget-busting monthly payment,” he said.

Student loans

Federal student loan rates are also fixed, so most borrowers won’t be immediately affected by a rate cut. However, if you have a private loan, those loans may be fixed or have a variable rate tied to the Treasury bill or other rates, which means as the Fed cuts rates, the rates on private student loans will come down as well.
Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less-expensive fixed-rate loan, according to higher education expert Mark Kantrowitz. 
However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, he said, “such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.”
Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.
As a result of the Fed’s string of rate hikes in recent years, top-yielding online savings accounts have offered the best returns in decades and still pay nearly 5%, according to McBride.
“This is still a good time to be a saver and a good time for cash,” he said. “The most competitive offers are still well ahead of inflation and that’s likely to persist.”
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Cathie Wood, CEO of Ark Invest, speaks during an interview on CNBC on the floor of the New York Stock Exchange on Feb. 27, 2023.
Brendan McDermid | Reuters

Innovation investor Cathie Wood’s struggling funds enjoyed a much-needed boost from Donald Trump’s reelection, but that hasn’t translated into investor inflows.
Wood’s flagship Ark Innovation ETF (ARKK) has surged more than 30% since Election Day on Nov. 5, pushing its year-to-date return to nearly 18%. Much of the gain came from its biggest holding Tesla, with a 16.3% weighting. The electric vehicle maker’s stock has skyrocketed about 70% since Trump claimed victory.

Still, the exchange-traded fund suffered $49 million in outflows in November and another $24 million in the first week of December, according to FactSet. They added to ARKK’s total outflows of more than $3 billion in 2024, in a record year for the ETF industry that experienced a whopping $1 trillion in new money.
“Investors continue to redeem shares. ARKK has lost its luster as the leading actively managed ETF,” said  Todd Rosenbluth, head of research at TMX VettaFi.

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The investor shot to fame during the Covid-19 pandemic for her bold calls on Tesla and popular Covid plays such as Zoom Video. However, the pandemic rally proved short-lived and ARKK has since lost about 60% of its value from its 2021 peak.
Wood is now betting that possible deregulation under Trump could sprout innovative developments after years of policy hurdles. She believes these technology advances could turbocharge the U.S. economy more powerfully than during the Reagan era.
Trump bump
Tesla has emerged as one of the biggest Trump beneficiaries in ARKK’s portfolio because of CEO Elon Musk, who poured $277 million into a pro-Trump campaign effort. Musk even got assigned a starring role by Trump, leading a so-called Department of Government Efficiency.

Following a massive postelection rally, Wood trimmed her Tesla holding in ARKK slightly, selling 51,335 shares on Wednesday for about $21.8 million, according to her daily update.

Arrows pointing outwards

Another top performer in ARKK has been Coinbase, which is the second-largest holding in the fund. The crypto exchange has seen shares rally more than 80% this year as bitcoin exceeded the key $100,000 threshold.
Investors have grown hopeful that Trump will usher in a golden age of crypto, which would include more supportive regulation for the industry and a potential national strategic bitcoin reserve or stockpile. This theme also benefited Robinhood, the sixth-biggest holding in ARKK, which has skyrocketed more than 213% in 2024.
Still, some of ARKK’s holdings have yet to return to their glory heydays during the pandemic even as tech benchmark Nasdaq Composite has hit multiple record highs. Roku is down 9% this year, while Pinterest has lost 16%. More

Traders work on the floor of the New York Stock Exchange during morning trading on Nov. 26, 2024.
Michael M. Santiago | Getty Images

Bitcoin exchange traded funds are now the largest holders of the flagship cryptocurrency. 
The 12 spot bitcoin ETFs in existence have collectively passed $100 billion in assets under management, one of the most successful ETF launches in history. 

The funds now own slightly more than 1.1 million bitcoin, equivalent to about 5% of all the bitcoin in existence. 

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Bitcoin in 2024

Collectively, bitcoin ETFs now own more of the cryptocurrency than legendary pseudonymous founder Satoshi Nakamoto, who is believed to control as much as 1.1 million bitcoin. 
Largest bitcoin holders

U.S. Spot ETFs            1,104,534
Satoshi Nakamoto   1,100,000
Binance                        633,000
MicroStrategy             402,100
U.S. Government       198,109
Chinese Government 194,000
Bitfinex                            184,027
Kraken                              158,959
Block One                        164,000
Robinhood                      142,361

Source:  Bloomberg/Eric Balchunas
“Bitcoin ETFs have become the vehicle of choice for bitcoin holders,” Brian Hartigan, global head of ETFs at Invesco, said Monday on CNBC’s “Halftime Report.” 

Bitcoin is now 1% of all ETF assets

Here’s the math: U.S. ETFs now have a little over $10 trillion in assets under management. With spot bitcoin ETFs now accounting for more than $100 billion in assets, bitcoin is now about 1% of the assets under management of the entire ETF universe. 

That 1% is a significant milestone. For years, bitcoin advocates have been looking for ways to convince skeptics they should allocate a small portion of their portfolio to bitcoin. 
A typical argument is that as assets under management have grown, investors should allocate 1% of their portfolio to bitcoin. The argument is that if bitcoin goes bust, losing 1% is no big deal, but the scarcity value of the cryptocurrency leaves it with a bigger chance of increasing in value over time.
It’s now becoming a bit easier to make that kind of argument, with bitcoin accounting for 1% of the assets under management in ETFs.
 “So for people asking that question, if you don’t own it, you’re 1% under allocated to bitcoin,” Hartigan said.

Why have bitcoin ETFs been such a hit?

 The ETFs’ popularity boils down to pent-up demand and an up market.
“I think everything lined up perfectly for these products coming to market,” Nate Geraci, president of The ETF Store, said Monday on “ETF Edge.” “Because, remember, you had over 10 years of pent-up demand here, because the first bitcoin ETF filing was all the way back in 2013, and this has been talked about ad nauseam over the past decade. So I think that created a lot of pent-up demand.”
A relentless up market was the second catalyst. 
“Bitcoin itself has obviously performed very well,” Geraci said, noting that the crypto has more than doubled this year. “That clearly helps. There’s just been a ton of coverage in this space that helps generate investor interest. So all of the ingredients have been there. It’s really been a perfect recipe.”

Bitcoin backers’ hopes for 2025

The bitcoin and ETF industry are expecting even more inflows in 2025 on two hopes. First, they want institutions to loosen investment requirements and permit clients to own and trade bitcoin. Second, they seek a friendlier regulatory environment.
“The ETF has become the liquidity vehicle for holding the digital assets themselves,” Hartigan said on CNBC’s “ETF Edge” program. “It’s liquid, that’s regulated, and I think that really touts the benefits of the ETF. So, hopefully that’s the kind of that intermediary vehicle that we needed to give the institutional marketplace more access to digital coin.”
President-elect Donald Trump’s announcement that venture capitalist David Sacks will be the crypto “czar” and the plan to nominate Paul Atkins to be chair of the U.S. Securities and Exchange Commission has bitcoin enthusiasts believing that a much friendlier regulatory environment is coming.
Atkins, a former Republican SEC commissioner, has been supportive of bringing more regulatory clarity to the crypto market.
“If the SEC were more accommodating and would, you know, deal straightforwardly with these various [crypto] firms, I think it would be a lot better to have things happen here in the United States rather than outside,” Atkins said in a “Kibbe on Liberty” podcast in February 2023. 
In that podcast, Atkins expressed support for a digital currency that is not controlled by the government.
“To have something that is not controlled by any particular entity, is not centralized, is a trustless type of product, where you have all the different miners and validators who are validating different transactions and appending them to the blockchain, makes a lot of sense,” he said.

Will bitcoin ETFs pass gold ETFs in 2025?

With spot bitcoin ETFs now over $100 billion in AUM, Geraci said there is a real chance bitcoin ETFs will pass gold ETFs next year.
“For context, the physical gold ETF category, which has been around for over 20 years, that has about $125 billion in assets [compared to $100 billion in spot bitcoin ETFs],” Geraci said.
“So, it’s not inconceivable to think that spot bitcoin ETFs will surpass gold ETFs sometime over the next several months, which is just astounding when you think about it, when I think about the demand here,” he added. More

Egg prices may approach record highs, just about two years after they peaked during the pandemic era.
Highly pathogenic avian influenza, better known as bird flu, has killed millions of chickens and reduced egg supply. Consumer egg demand is also highest around Thanksgiving and Christmas.
The trajectory of the bird flu outbreak is unclear.

A customer walks by a display of fresh eggs at a grocery store on Sept. 25, 2024 in San Anselmo, California.
Justin Sullivan | Getty Images

It’s déjà vu for grocery shoppers, as the price of those Grade A eggs has spiked in recent months, just two years after egg prices soared to record highs.
The average retail price of eggs in the U.S. has risen 38% since November 2023, according to consumer price index data issued Wednesday. Prices rose 8% last month alone.

A carton of a dozen large Grade A eggs cost $3.65 in November, up from $2.14 a year earlier, according to the U.S. Bureau of Labor Statistics.
There are two primary reasons for the surge: bird flu, which has reduced egg supply, and the strong consumer demand that’s typical around the winter holiday season, according to economists and market analysts.
“There’s a very real chance we could flirt with record highs” for prices, said Brian Moscogiuri, vice president of Eggs Unlimited, an egg supplier.

Grade A egg prices peaked at $4.82 a dozen in January 2023, having jumped from $1.93 in January 2022.
At a time of high pandemic-era inflation, eggs were a standout, with an annual inflation rate of 60% in calendar-year 2022, according to CPI data. They even entered the zeitgeist: Pop star Taylor Swift told comedian Trevor Noah at the Grammy Awards in February 2023 that her fans would “get on it” to help lower egg prices.

How a ‘serious’ bird flu outbreak is affecting egg prices

Now, as in 2022-23, highly pathogenic avian influenza — better known as bird flu — is a big culprit.
Bird flu is a highly contagious and lethal disease among birds, including chickens. The U.S. is in the midst of a “serious outbreak,” Moscogiuri said.
The disease entered the U.S. in late 2021 and has lingered, experts said. Prior to that, the last time bird flu had impacted egg-laying chickens at commercial farms was in 2015, Moscogiuri said.
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About 33 million commercial egg layers have been killed by bird flu in 2024, according to data from the Centers for Disease Control and Prevention.
That has “caused an egg supply shortage,” said Ryan Hojnowski, an egg analyst at Expana, an agricultural market research firm.

Roughly half of the commercial egg layer deaths for 2024 — about 15 million birds — have occurred since Oct. 15, according to CDC data. Wholesale egg prices are up 97% since mid-October, according to Expana.
“If you have one infection, chances are that d— near all the birds are infected, or will be infected in a very short time,” said Andrew Novakovic, a professor of agricultural economics at Cornell SC Johnson College of Business.

Thanksgiving, Christmas holidays raise egg demand

The egg supply shortage is also running headlong into peak season for consumer demand.
“Q4 is when we typically see the strongest demand for eggs as consumers tend to bake around the Thanksgiving and Christmas holidays,” Hojnowski said.
High demand and reduced supply have combined to lift prices, experts said.
“When we get past this holiday effect, I think we’ll see some [price] softening,” Novakovic said.

Karrastock | Moment | Getty Images

But the trajectory is difficult to predict, experts said.
For one, bird flu’s staying power is unclear. There have been recent outbreaks in U.S. dairy cows, and “several recent human cases in U.S. dairy and poultry workers,” the CDC said. As of Dec. 11, the current public health risk was “low,” however, the CDC website said.  
The U.S. Department of Agriculture on Friday issued a federal order requiring testing of U.S. milk supply for bird flu, to help track and contain the virus.
“Like any infectious disease, it’s a little hard to accurately forecast how it’s going to progress,” Novakovic said. More

The economy is doing “exceptionally well” as President-elect Donald Trump gets ready to enter the White House, said Moody’s Analytics chief economist Mark Zandi.
But, Zandi added, “I do think there are some potential storms coming.”

Mark Zandi, chief economist at Moody’s Analytics, testifies during a Senate Budget Committee hearing in the Dirksen Building in Washington, D.C., May 4, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images

The economy is doing “exceptionally well” as President-elect Donald Trump gets ready to enter the White House, according to Moody’s Analytics chief economist Mark Zandi.
Zandi, speaking at the Consumer Federation of America’s financial services conference on Wednesday, noted some of the glowing areas: Gross domestic product has been growing at around 3%, productivity and business formation rates are strong, and the stock market is up.

“The economy can weather a lot of storms,” Zandi said.
But, he added, “I do think there are some potential storms coming” next year under the new administration.

Immigration policy, tariffs could affect economy

Zandi expects Trump to act quickly on deporting immigrants and implementing tariffs, two moves that could have profound impacts on the U.S. economy.
“I believe President Trump is going to do what he said he’ll do on the campaign trail,” Zandi said. “He’s going to be quite aggressive in pursuing the policies.”
Immigration has played a big role in the economy’s strength, Zandi said.

Others agree. “Recent immigrants have flowed disproportionately into the parts of the labor force that were particularly tight in 2022, contributing to labor supply in places where it was most badly needed,” Goldman Sachs analysts wrote in a note to clients in May.

Meanwhile, tariffs create “a whole lot of uncertainty for businesses,” Zandi said. As a result, they could lead to job losses.
Tariffs are also likely to affect people’s spending, he said.
“It’s going to mean higher costs for consumers — it’s a tax increase,” Zandi said.
Trump’s universal tariff proposals could cause prices to skyrocket on clothing, toys, furniture, household appliances, footwear and travel goods, according to a recent report from the National Retail Federation.
Trump has said he would impose a 10% or 20% tariff on all imports across the board.
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The NRF found that the impact of the tariffs would be “dramatic” double-digit percentage price spikes in nearly all six retail categories that the trade group examined.
For example, the cost of clothing could rise between 12.5% and 20.6%, the analysis found. That means an $80 pair of men’s jeans would instead cost between $90 and $96.
These new prices would squeeze consumer budgets, especially for low-income households, which spend three times as much of their after-tax income on apparel as high-income households spend, according to the NRF report, which cited Bureau of Labor Statistics data. More