Bridgewater Associates founder and billionaire Ray Dalio warned Monday that Moody’s downgrade of the U.S. sovereign credit rating understates the threat to U.S. Treasurys, saying the credit agency isn’t taking into account the risk of the federal government simply printing money to pay its debt. “You should know that credit ratings understate credit risks because they only rate the risk of the government not paying its debt,” Dalio said in a post on social media platform X. “They don’t include the greater risk that the countries in debt will print money to pay their debts thus causing holders of the bonds to suffer losses from the decreased value of the money they’re getting (rather than from the decreased quantity of money they’re getting),” the Bridgewater founder said. Moody’s on Friday cut the U.S. credit rating one notch to Aa1 from Aaa, citing the federal government’s ballooning budget deficit and soaring interest payments on the debt. It was the last of the three major credit agencies to downgrade the U.S. from the highest possible rating. U.S. stocks fell Monday as the 30-year Treasury bond yield jumped to 4.995% and the 10-year note yield climbed to 4.521% in response to Moody’s downgrade. “Said differently, for those who care about the value of their money, the risks for U.S. government debt are greater than the rating agencies are conveying,” Dalio said. Bridgewater’s assets under management dropped 18% in 2024 to some $92 billion, Reuters reported in March, down from a recent peak of $150 billion in 2021.

Wall Street titan Jamie Dimon said Thursday that a recession is still a serious possibility for the United States, even after the recent rollback of tariffs on China. “If there’s a recession, I don’t know how big it will be or how long it will last. Hopefully we’ll avoid it, but I wouldn’t take it off the table at this point,” the JPMorgan Chase CEO said in an interview with Bloomberg Television. Specifically, Dimon said he would defer to his bank’s economists, who put recession odds at close to a toss-up. Michael Feroli, the firm’s chief U.S. economist, said in a note to clients on Tuesday that the recession outlook is “still elevated, but now below 50%.”However, even with the tariff pauses, the import taxes on goods entering the United States are now sharply higher than they were last year and could cause economic damage, according to Dimon. “Even at this level, you see people holding back on investment and thinking through what they want to do,” Dimon said. Dimon’s comments come less than a week after the U.S. and China announced that they were sharply reducing tariffs on one another for 90 days. The U.S. has also implemented a 90-day pause for many tariffs on other nations. Thursday’s comments mark a change for Dimon, who said last month before the China truce that a recession was likely. He also said there is still “uncertainty” on the tariff front but the pauses are a positive for the economy and market. “I think the right thing to do is to back off some of that stuff and engage in conversation,” Dimon said.

Consumer prices climbed last month at the slowest pace since February 2021, as the inflationary effects of President Donald Trump's tariffs had yet to hit Americans' wallets. The Consumer Price Index, which tracks a variety of costs throughout the economy, rose 2.3% year on year in April, the Bureau of Labor Statistics reported Tuesday, down from 2.4% in March. Analysts said the slower price growth may still not prompt the Federal Reserve, which is tasked with managing inflation, from lowering interest rates. Trump has repeatedly called for the central bank to do so, bashing its decision last week to hold rates steady. The latest inflation reading is "likely a welcome reprieve for the Fed; however, the larger tariff-related price adjustments are likely to come over the next few months," Goldman Sachs analysts said in a note to clients Tuesday. "Consequently, we still anticipate them remaining on the sidelines in the near term." Even as the pace of price growth has slowed, consumers now report unprecedented levels of uncertainty amid fast-changing headlines about how Trump’s tariffs will affect the economy. “Tariffs are now on top of consumers’ minds, with mentions of tariffs reaching an all-time high,” the Conference Board, which releases a closely watched monthly consumer-sentiment survey, said late last month. “Consumers explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy.” The White House's back-and-forth tariff announcements are likely to have a whipsawing effect on inflation readings for months to come, said Seema Shah, chief strategist at Principal Asset Management financial group. "A clear read on the inflation trend won’t be visible for several months yet," she wrote in a note Tuesday. "This prolonged inflation uncertainty likely implies a prolonged Fed pause." Stock markets appeared to shrug off the inflation report, with the three major U.S. indexes largely flat in Tuesday morning trading. Trump has asserted that there is "virtually no inflation," and some major consumer categories are indeed seeing price declines. Today, regular unleaded fuel costs about $3.16 per gallon, down from $3.62 a year ago, according to AAA. Overall energy costs are also slightly lower, government data show, though some analysts have warned the decreases could reflect slower energy demand — a trend that could reverse during the summer months.Grocery price growth also saw its sharpest slowdown since 2023 last month, largely driven by falling egg costs. Prices for that staple have settled at a much higher level than just months ago, however, and economists expect Trump's trade war to ripple across supermarket shelves in sometimes hard-to-predict ways over the coming months. Inflation, at any rate, is still hotter than many households would like and has hovered just above the Fed's 2% target level for nearly the past year. The “core” inflation measure, which strips out food and energy, was up 2.8% in April, the same as in March. Housing continues to be a major culprit: Shelter costs are one-third of the CPI report, and they've have continued to rise, although not as quickly as during the Biden administration. While 12-month rent growth has slowed, at 4% it is about equal to pre-pandemic highs. The BLS’ official measure of overall housing costs is also at 4%, higher than pre-Covid levels. In general, uncertainty continues to reign from Main Street shops to executive boardrooms, spanning fireworks distributors, border towns and travel agencies. “It is currently hard to judge the underlying pace of growth of the U.S. economy,” Federal Reserve Governor Adriana Kugler said in remarks Monday, because Trump’s tariffs continue to distort economic data. Her comments were prepared before the 90-day U.S.-China tariff pause unveiled Monday, but even the reduced 30% effective import tax on Chinese goods is still expected to put pressure on what Americans pay for many items. The Yale Budget Lab estimated Monday that consumers will continue to face an average effective tariff of 17.8%, the highest since 1934. “Given these expected price increases, real incomes will fall, and operating costs will rise, which will lead consumers to demand fewer final goods and services and firms to demand fewer inputs,” Kugler said. “Ultimately, I see the U.S. as likely to experience lower growth and higher inflation

The Federal Reserve is holding interest rates steady as it navigates uncertainty kicked up by a president who keeps haranguing the central bank to lower them. “‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue,” President Donald Trump posted on his Truth Social platform Friday morning, renewing a long-running barrage of insults against the central bank chair. “Other than that, I like him very much!” he added. The president’s public pressure campaign on the Fed comes as the central bank faces an ironic, whiplash-inducing reversal. Just months ago, it was on the verge of a rare feat — wrestling down a historic run-up of inflation without triggering mass layoffs, known as a “soft landing” — and preparing to keep cutting borrowing costs. But Trump’s rapid upending of global trade has pushed the Fed and its leader into a difficult position, in which they feel a wait-and-see approach may be their best strategy for now. “The Fed has been plunged into an almost impossible situation whereby its two mandates will likely move in opposite directions,” said Seema Shah, chief global strategist at Principal Asset Management, referring to the Fed’s dual mission of keeping employment high and inflation low. “But government policy — which is incredibly uncertain itself — will dictate both the timing and magnitudes of those moves,” she wrote in a note to clients Wednesday. The concern is that an economy damaged by tariffs will force the Fed to cut interest rates to stave off job losses, at the risk of driving inflation higher. After having peaked above 9% in mid-2022, the annual inflation rate has been hovering just north of the central bank’s 2% target for nearly a year. Powell said Wednesday that holding pat on rates allows the Fed to “wait and see” how the economy unfolds. But policymakers warned in their statement Wednesday that “the risks of higher unemployment and higher inflation have risen,” renewing concerns about “stagflation” — a situation in which job losses and price hikes both mount even as the economy lags. “The tariff shock will reduce real GDP growth and raise prices at the same time, putting the Fed on the horns of a dilemma,” Brian Coulton, chief economist at Fitch Ratings, warned in a note Wednesday afternoon. “The policy move necessary to maintain full employment is the opposite of that necessary to contain inflation. Moving one policy lever to hit two conflicting targets is problematic.” Politics are adding to the difficulty. Trump has broken long-standing norms against political influence over monetary policy by repeatedly bashing Powell, whom he appointed in 2018. The president’s fresh criticism Friday follows weeks of escalating attacks. “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” he wrote on Truth Social on April 4. Two weeks later, he posted again, nicknaming Powell “Too Late” and saying his “termination cannot come fast enough!” In yet another post a week later, Trump called Powell a “major loser.” Powell told reporters Wednesday that Trump’s comments had no impact. “It really doesn’t affect either our job or the way we do it,” he said, adding that neither has he asked for a meeting with Trump nor has the president requested one. President Joe Biden reappointed Powell in 2022, and despite the recent barrage of criticism, Trump told NBC News’ Kristen Welker last week that he wouldn’t seek to remove him before his term ends in May 2026. “Why would I do that? I get to replace the person in another short period of time,” he said. The challenges of recent months mark the second time Powell has weighed how to handle economic fallout from Trump’s trade policies. In 2019, Trump was similarly threatening higher duties on China. Powell, who faced similar jabs from Trump through a barrage of Twitter posts at the time, wound up cutting interest rates three times to pre-emptively cushion the U.S. economy from the blow of higher duties. Powell signaled Wednesday that this time is different. The Fed was less worried in 2019 about the inflationary impacts of lower rates, he indicated, because prices were rising more slowly at a slower pace than they are now. Core personal consumption expenditures, the Fed’s preferred measure of inflation, showed prices rising at an annual rate of 2.6% in March, whereas the same measure clocked in beneath 2% for all of 2019. “It’s not a situation where we can be pre-emptive, because we actually don’t know what the right response to the data will be until we see more data,” Powell said. Although markets expect the Fed to cut interest rates three times by the end of the year, some analysts aren’t so sure. Bank of America researchers said Wednesday, “If our base case of a steady labor market and rising inflation is correct, we don’t see a path to cuts in 2025.” In the meantime, Powell has avoided committing to future moves given the widespread uncertainty Trump’s tariffs have generated for corporate bosses, small-business owners and consumers alike. “There are cases in which it would be appropriate for us to cut rates this year. There are cases in which it wouldn’t,” he told reporters Wednesday. “We just don’t know.

This year’s new college graduates are heading into a tougher job market than last year’s — who had it worse off than the class before that — just as the Trump administration cracks down on student loan repayments. Recent grads’ unemployment rate was 5.8% as of March, up from 4.6% a year earlier, the Federal Reserve Bank of New York reported last week. The share of new graduates working jobs that don’t require their degrees — a situation known as “underemployment” — hit 41.2% in March, rising from 40.6% that same month in 2024. “Right now things are pretty frozen,” Allison Shrivastava, an economist at Indeed Hiring Lab, said of entry-level prospects. “A lot of employers and job seekers are both kind of deer-in-headlights, not sure what to do.” Employers and job seekers are both kind of deer-in-headlights, not sure what to do. Allison Shrivastava, economist, Indeed Hiring Lab That squares with Julia Abbott’s experience. “I just feel pretty screwed as it is right now,” said the psychology major who’s graduating this month from James Madison University in Harrisonburg, Virginia. She said she’s applied to over 200 roles in social media and marketing, but “minimal interviews come out of it.” Internship postings typically rise sharply in early spring, but they’re lagging 11 percentage points behind last year’s levels, Indeed said in April. The hiring platform sees demand for interns as a stronger gauge of new grads’ job prospects than entry-level postings, which increasingly target people with at least a few years’ experience. In a worrying sign for the class of 2025, internship openings are “far below where they were in 2023 and 2022, when the labor market was exceptionally competitive,” Shrivastava said. Young college grads have historically seen lower unemployment levels than the labor force overall, and they still do. But as The Atlantic pointed out Wednesday, this gap has narrowed to a record low, taking some of the shine off the traditional benefits of a bachelor’s degree. Meanwhile, the Trump administration is restarting the “involuntary” repayment of federal student loans in default, a move that could sap money from paychecks, tax refunds, Social Security payments and disability and retirement benefits from millions of borrowers. Repayments were paused during President Donald Trump’s first term in 2020 in response to Covid-19. The pandemic-era reprieve from forced collections ends Monday, just as a new TransUnion report finds a record share of federal student loan borrowers are 90 days or more past due and at risk of default — at 20.5% as of February, up 10 percentage points from five years earlier.

The United States added 177,000 jobs in April, more than analysts had expected, in the face of broader economic uncertainty sparked by President Donald Trump's tariffs. Last month's job gains were a bit softer than the revised 185,000 added in March, according to data released Friday by the Bureau of Labor Statistics, but ahead of forecasts for 133,000 net new roles in April. The annual unemployment rate remained unchanged at 4.2%. Transportation and warehousing employers added 29,000 roles in April as consumers and businesses went on a pre-tariff buying spree of foreign goods. Federal government head counts, meanwhile, fell by 9,000 and have declined by 26,000 since January, reflecting the impact of sweeping cuts largely driven by multibillionaire Trump adviser Elon Musk's Department of Government Efficiency initiative.Despite the jobs gains, the report showed signs of a slowing economy elsewhere. Average hourly earnings climbed just 0.17% for the month, below the 0.3% forecast by economists. The share of unemployed people out of work for at least 27 weeks also returned to its pandemic-era high of 23.5%. So did the median unemployment duration, which climbed to 10.4 weeks. Those latter two figures "both suggest that it is taking longer for unemployed workers to find new opportunities, and reinforce a growing divide in the market between those out of work and those who are employed," Cory Stahle, an economist at Indeed Hiring Lab said in a statement. "So far in 2025, the market has been marked by a low firing, low hiring trend that can’t last forever."Trump took to his Truth Social platform following the report to repeat his recent calls for another rate cut. "Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!! Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!! DJT," the president wrote, returning to a theme he has recently emphasized despite campaigning on "immediate" economic relief. Some analysts expect to see further headwinds turn up in the weeks and months ahead. The impact of tariffs on slowing port shipments, for instance, has begun to appear only recently. “Not unlike an earthquake that’s offshore, it can take a while for the tsunami to come to land,” said Mark Hamrick, senior economic analyst at the consumer finance firm Bankrate. "So what happens after that? You have a diminution in cargo being trucked or perhaps carried by rail to some degree across the country," he said, which could lead to supply chain disruptions that "consumers will begin to notice at some point in the coming weeks or months." Hamrick also pointed to cracks in a retail landscape where hiring has flatlined, and warned that even modest sales declines due to potential product shortages "can be sufficiently significant to cause a problem, and therefore then be reflected in employment trends.”

President Donald Trump on Friday issued his latest call for the U.S. Federal Reserve to lower interest rates, following a better-than-expected jobs report for April. “Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!!” Trump wrote in an exuberant Truth Social post minutes after the latest nonfarm payrolls data came out. “Consumers have been waiting for years to see pricing come down. NO INFLATION, THE FED SHOULD LOWER ITS RATE!!!” he wrote. The Bureau of Labor Statistics reported Friday morning that nonfarm payrolls increased by a seasonally adjusted 177,000 jobs in April, beating the Dow Jones estimate of 133,000. The figure came in below the downwardly revised 185,000 jobs added in March, however. The post shows Trump continuing his efforts to influence the central bank’s decision-making process, challenging its long-held independence from the executive branch. But it also shows Trump further scaling back his criticism of Fed Chair Jerome Powell, whose job until recently appeared to be under threat.Since then, Trump has said he has “no intention” of firing Powell, and he has dialed back his criticism. “I have a Fed person who is not really doing a good job,” Trump said at a rally in Michigan on Tuesday, without ever mentioning Powell by name. “I want to be very nice and respectful to the Fed,” he added. “You are not supposed to criticize the Fed; you are supposed to let him do his own thing, but I know much more than he does about interest rates, believe me.” Trump’s Friday morning message stood in contrast to his response to Wednesday’s news that the U.S. economy contracted for the first time since 2022. Trump in that case blamed former President Joe Biden for the bad first-quarter GDP reading, claiming, “he left us with bad numbers.” Later Wednesday, Trump suggested he would blame Biden again in the second quarter. — CNBC’s Jeff Cox contributed to this report. Trump has long criticized Powell and badgered him to lower rates in hopes of spurring growth. Economic aide Kevin Hassett said last month that the White House was exploring rules under which the president could fire Powell. Powell has maintained that Trump cannot legally fire him before his term as Fed chair expires in May 2026. But fears that Trump might still try to replace Powell with someone willing to bend to political pressure on rates have spooked markets and investors around the world. On April 21, those fears triggered a sell-off that saw major indexes and the U.S. dollar slump on the same day.

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday. The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs. In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said. Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found. Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so. “A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.” “For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said. He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.

U.S. stocks tumbled and bonds sold off Monday after President Donald Trump lobbed new insults at Federal Reserve Chair Jerome Powell, pressuring him to cut interest rates while markets are already contending with shocks from his tariff policy. The S&P closed down 2.4%. Since its February highs, the index is now off 16%, approaching bear market territory of a 20% decline. The tech-heavy Nasdaq fell more than 2.5%. The Dow Jones Industrial Average lost almost 1,000 points, or 2.5%. The yield of the 10-year U.S. Treasury note surged to 4.41%, its highest level in more than a week. All three indexes are down more than 9% since Trump's April 2 "Liberation Day" tariffs announcement. In a post on Truth Social at 9:41 a.m., Trump claimed that “preemptive cuts” were being called for “by many” now that the economy was facing what he described as “virtually No Inflation.” He didn’t say who has called for the pre-emptive cuts, which the Fed rarely performs. Without the cuts, Trump said, the economy risks slowing, "unless Mr. Too Late, a major loser, lowers interest rates, NOW." "Powell has always been 'To Late,' except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?" The Fed most recently cut interest rates on Dec. 18, after Trump was re-elected. Though Trump has long criticized Powell, whom he appointed during his first term, his complaints have ramped up in recent days amid a major market reaction to his tariffs shock.

KANSAS CITY, Mo. — In her 28 years working for the federal government, Shea Giagnorio provided day care for the children of U.S. soldiers, training for employees and oversight for safety net programs. Public service took her from Germany to Alaska to Kansas City, Missouri, where she moved last year for a long-sought promotion. But when she reported to a downtown federal building for work one day last month, her access card did not work. After a co-worker let her into the building, she checked her email: Her entire office had been let go in the latest mass firing ordered by President Donald Trump’s administration. The 46-year-old single mom has canceled her apartment lease, is selling her new furniture and may have to pull her daughter out of college. She wonders what will happen to the at-risk populations her team helped serve at the Administration for Children and Families, a part of the U.S. Department of Health and Human Services. “Not only me, but all these peoples’ lives are turned upside down,” Giagnorio said. The impact of the cuts by Trump appointees and Elon Musk’s Department of Government Efficiency can be found everywhere in the Kansas City metropolitan area, which has long been a major hub for federal agencies about 1,000 miles away from Washington, D.C. Money once promised to the region for public health, environmental, diversity, food aid and an array of other programs has been axed, and thousands of local jobs are in jeopardy. With nearly 30,000 workers, the federal government is the largest employer in the region. One longtime Kansas City economic researcher said he believes the region could lose 6,000 good-paying federal jobs, which in turn would wipe out thousands of others in service industries. An IRS worker said thousands of her co-workers fear they will lose their jobs, even as they put in overtime processing tax refunds in a building so crowded that they struggle to find desks. Under pressure, hundreds more agreed this past week to retire early or take a buyout. “It’s a kick in the stomach to people that are doing everything they can to meet what’s required of them,” said Shannon Ellis, a longtime IRS customer service representative and president of the union representing local workers. By Thursday, at least 238 Kansas City workers had taken the buyout offers and were expected to leave the agency in coming weeks. Ellis noted many of those same workers had been told they were essential and required to work overtime during tax season, some seven days per week. A U.S. Department of Agriculture grant revocation disrupted a historically Black neighborhood’s plan to expand its program growing fresh produce in a food desert. A nearby pantry reduced its monthly grocery allotment for those in need after federal cuts left food banks shorthanded. Urban farmer Rosie Warren grew 2,500 pounds of fruits and vegetables last year in community gardens to help feed the Ivanhoe neighborhood, where many Black families were concentrated under housing segregation policies of much of the 20th century. Warren harvested greens, potatoes and watermelons as part of an effort to address food insecurity and health concerns in a neighborhood challenged by blight, crime and poverty. She was ecstatic last fall when the USDA awarded the neighborhood council a three-year, $130,000 grant to expand the gardens and farmers’ market serving the area. In February, the council received a notice terminating the grant. The USDA had determined the award “no longer effectuates agency priorities regarding diversity, equity, and inclusion programs and activities.”