AFP USA

President Donald Trump said Wednesday the United States will impose a 15 percent tariff on imports from South Korea, as he touted a “full and complete trade deal” between the two countries.”South Korea will give to the United States $350 Billion Dollars for Investments,” Trump said in a post on his Truth Social platform, adding that the country would buy $100 billion in liquefied natural gas or other energy products.The 15 percent rate is below a 25 percent tariff that Trump had threatened earlier, and was equivalent to deals with Japan and the European Union.Trump added that an additional unspecified “large sum of money” will be invested by Seoul.”This sum will be announced within the next two weeks when the President of South Korea, Lee Jae Myung, comes to the White House for a Bilateral Meeting,” Trump said, offering congratulations to his South Korean counterpart for his “electoral success.”South Korea’s Finance Minister Koo Yun-cheol said Seoul’s commitment to help the United States revive its shipbuilding industry was instrumental in reaching the deal.”I believe MASGA made the greatest contribution to reaching today’s agreement,” Koo said at a news conference in Washington, referring to the “Make American Shipbuilding Great Again” proposal.”Our world-class shipbuilding companies, equipped with the highest level of ship design and construction capabilities, are expected to help revive the US shipbuilding industry,” he said.Shares in South Korean shipbuilder Hanwha Ocean, which owns a shipyard in Philadelphia, soared more than 15 percent Thursday. The leaders’ White House meeting will be their first since Lee assumed the presidency in June.In a statement on Facebook, Lee called the deal “the first major trade challenge” since his administration took power, adding: “We have overcome a major hurdle.””Through this deal, the government has eliminated uncertainty surrounding export conditions and ensured that US tariffs on our exports are either lower than or equal to those imposed on our major trade competitors.”- Mixed reaction -Lee was elected in a snap vote last month following the impeachment of predecessor Yoon Suk Yeol over his disastrous martial law declaration in December.The deal marks an early victory for Lee’s tenure as head of the export-reliant economy, Asia’s fourth biggest.”This agreement represents the convergence of US interests in revitalizing its manufacturing sector and our determination to strengthen Korean companies’ competitiveness in the American market,” Lee’s statement continued.But there were mixed reactions in South Korea. Its six major business associations, including the Korea Chamber of Commerce, said in a joint statement: “We view this agreement as a critical milestone that will not only ease trade-related uncertainties but also pave the way for a significant strengthening of economic cooperation between the two countries.”With much of the external uncertainty now resolved, the Korean business community will redouble efforts to boost domestic investment and job creation.”But a handful of civic groups, including farmers and labour organisations, protested at the US Embassy in central Seoul, opposing “Trump’s madman strategy.” Demonstrators held signs reading “No Trump! No King!” and pointed out that there may be additional negotiations when Lee meets Trump.”Trump’s actions amount to excessive interference in our domestic affairs,” said Park Sung-hoon, head of the Korean Apple Growers Association.Since returning to the White House in January, Trump has imposed a sweeping 10 percent tariff on trading partners — with extra rates for dozens of economies set for August 1 — alongside steeper tolls on steel, aluminium and autos.News of the deal with South Korea came as Trump on Wednesday imposed 25 percent tariffs on Indian goods and 50 percent on those from Brazil.

For over a month, Alberto has hardly dared to leave the small room he rents in someone’s backyard for fear of encountering the masked police who have been rounding up immigrants in Los Angeles.”It’s terrible,” sighed the 60-year-old Salvadoran, who does not have a US visa.”It’s a confinement I wouldn’t wish upon anyone.” To survive, Alberto — AFP agreed to use a pseudonym — relies on an organization that delivers food to him twice a week.”It helps me a lot, because if I don’t have this… how will I eat?” said Alberto, who has not been to his job at a car wash for weeks.The sudden intensification of immigration enforcement activity in Los Angeles in early June saw scores of people — mostly Latinos — arrested at car washes, hardware stores, on farms and even in the street.Videos circulating on social media showed masked and heavily armed men pouncing on people who they claimed were hardened criminals.However, critics of the Immigration and Customs Enforcement (ICE) sweeps say those snatched were only trying to earn a meagre wage in jobs that many Americans don’t want to do.The raids — slammed as brutal and seemingly arbitrary — sparked a wave of demonstrations that gripped the city for weeks, including some that spiraled into violence and vandalism.Alberto decided to hole up in his room after one such raid on a car wash in which some of his friends were arrested, and subsequently deported.Despite being pre-diabetic, he is hesitant to attend an upcoming medical appointment. His only breath of fresh air is pacing the private alley in front of his home. “I’m very stressed. I have headaches and body pain because I was used to working,” he said. In 15 years in the United States, Trump’s second term has turned out to be “worse than anything” for him. – ‘Ghost town’ – Trump’s immigration offensive was a major feature of his re-election campaign, even winning the favor of some voters in liberal Los Angeles.But its ferocity, in a place that is home to hundreds of thousands of undocumented workers, has taken the city by surprise.Faced with mounting raids, migrants are limiting their movement as much as possible. In June, the use of the public transportation system — a key network for the city’s poorer residents — dropped by 13.5 percent compared to the previous month. “As you’re driving through certain neighborhoods, it looks like a ghost town sometimes,” said Norma Fajardo, from the CLEAN Carwash Worker Center, a non-profit organization that supports these workers. It has joined forces with other groups to deliver hundreds of bags of food every week to those afraid to step outside.”There is a huge need for this,” said the 37-year-old American.”It’s very saddening and infuriating. Workers should be able to go to work and not fear getting kidnapped.”In June, ICE agents arrested over 2,200 people in the Los Angeles area, according to internal documents analyzed by AFP. About 60 percent of them had no criminal record. Given the colossal resources recently allocated to ICE by Congress — nearly $30 billion to bolster immigration enforcement, including funding to recruit 10,000 additional agents — Fajardo says she is not expecting any let up.- ‘New normal’ – “It seems like this is the new normal,” she sighed.”When we first heard of an ICE raid at a car wash, we were in emergency crisis mode. Now we are just really accepting that we need to plan for the long term.”Food assistance has also become essential for Marisol, a Honduran woman who has been confined to her building for weeks with 12 family members.”We constantly thank God (for the food deliveries) because this has been a huge relief,” says the 62-year-old Catholic, who has not attended Mass in weeks.Marisol — not her real name — has hung up curtains on the windows at her home entrance to block any view from outside.She forbids her grandchildren from opening the door and worries enormously when her daughters venture out to work a few hours to provide for the family’s needs.”Every time they go out, I pray to God that they come back, because you never know what might happen,” she said. Marisol and her family fled a Honduran crime gang 15 years ago because they wanted to forcibly recruit her children.Now, some of them wonder if it’s worth continuing to live in the United States. “My sons have already said to me: ‘Mom, sometimes I would prefer to go to Europe.'” 

The issue of academic research on the Middle East has become a political flashpoint in the United States, where critics of Israel allege a “Palestine exception” exists when it comes to free speech rights.Case in point, recently a special edition of the prestigious Harvard Educational Review (HER) was in the works, entirely dedicated to the hot-button issue of the Palestinians — the articles had been painstakingly written, edited and approved.But authors said they received an unusual demand for a final readout by lawyers, which soon derailed their efforts.The publisher’s stunning late-stage decision to scrap the entire edition reflects the overheated political climate in the US where academic research on the Middle East has attracted accusations of so-called “wokeism” and “anti-Semitism” from President Donald Trump, as conflict rages in the region.The edition began taking shape when, in March 2024 — six months after the deadly October 7 Hamas attacks on Israel and the Israeli reprisals in the Gaza Strip — the renowned Harvard publication called for papers for a special issue on “Education and Palestine.” Anthropologist Thea Abu El-Haj and her colleagues submitted a paper on “scholasticide,” a term describing the destruction of an education system, like in Gaza, with reference to the experience of Palestinian teachers during the Lebanese Civil War between 1975 and 1990.But then the authors received phone calls informing them that the text would have to be submitted to Harvard’s Office of the General Counsel for a “risk assessment.””I have been publishing for decades in academic journals — including HER twice –and I have never been asked for this kind of review,” said El-Haj, a professor at Columbia University’s Barnard College.After the authors objected to “censorship,” the director of Harvard Education Press Jessica Fiorillo, told the authors the special issue had been cancelled in its entirety. – ‘Censorship’? -Fiorillo denied “censorship” in a memo to the authors, seen by AFP, blaming inadequate review because the editors insisted on limiting the publisher’s involvement to copyediting — without touching the “politically charged content.” “The only explanation that makes sense to me is that this is another instance of what has been called the ‘Palestine exception’ to free speech,” said El-Haj, accusing Harvard of not upholding free speech while proclaiming to champion it amid its fight with Trump.Since returning to power, Trump has accused prestigious US universities of anti-Semitism for failing to protect Jewish students during protests against Israel’s war in Gaza.In an escalating war of attrition against Harvard, Trump sought to cut more than $2.6 billion of funding to the Ivy League university, while seeking to block entry of international students — a quarter of its enrollment.Harvard said it had strengthened measures to protect Jewish and Israeli students while fighting the government’s measures in court. “The chilling climate for scholarly inquiry about Palestine at Harvard (and beyond) has been difficult for some time. Faculty, staff, and students have understandably felt a generalized cloud of fear and anxiety,” Margaret Litvin, an Arabic literature professor at Boston University, told AFP.At the start of the year, Harvard also adopted a definition of anti-Semitism used by the International Holocaust Remembrance Alliance (IHRA).That definition is contested, however, as critics argue it may prevent criticism of Israel. That distinction appears to be at the heart of the furor over the “education and Palestine” edition of the HER, said Chandni Desai, a University of Toronto professor, who was supposed to pen an article for the journal. Harvard University did not comment. The submitted articles would “likely fail” to have passed the IHRA definition test because “all the pieces are critical of Israel,” Desai said.”We’ve never seen an entire special issue collection being canceled — especially after… contracts have been signed and reviews and revisions done.”

Time is running short for governments to strike deals with Washington to avert tariff hikes that Donald Trump has vowed against dozens of economies — and the US president continues to expand his trade wars.As the clock ticked down on a Friday deadline for higher levies to take effect on goods from various trading partners, Trump announced a trade deal with South Korea and separate duties on Brazilian and Indian imports.He also signed an order Wednesday to impose previously-threatened 50 percent tariffs on certain copper products and end a tariff exemption for low-value shipments from abroad.The tariff hikes due Friday were initially announced in April as part of a package where Trump slapped a 10 percent levy on goods from almost all trading partners — citing unfair trade practices.This rate was set to rise to varying levels for dozens of economies like the European Union, Japan and others, but Washington twice postponed their implementation as financial markets gyrated.So far, Britain, Vietnam, Japan, Indonesia, the Philippines, the EU and South Korea have reached initial deals with Washington to secure less punishing conditions.While the United States and China earlier slapped escalating tariffs on each other’s products, both sides are working to further a truce maintaining duties at lower levels.- ‘Big day’ -But Trump has been pushing ahead in his efforts to reshape global trade. The US leader insisted Wednesday that the August 1 deadline “will not be extended” any further.In a Truth Social post, he vowed that this would be “a big day for America.”Although Trump has promised a surge in government revenues from his duties, economists warn that higher tariffs can fuel an uptick in inflation and weigh on economic growth. This could change consumption patterns.Already, consumers face an overall average effective tariff rate that is the highest since the 1930s, according to a recent analysis by The Budget Lab at Yale University.The effect on consumer prices has been limited so far. But analysts cautioned this could become more pronounced as businesses run down on existing inventory and pass on more costs to buyers.- Tariff blitz, delays -Among Trump’s latest announcements were a 25 percent duty on Indian goods to begin Friday — slightly lower than previously threatened — after talks between Washington and New Delhi failed to bring about a trade pact.India would face an unspecified “penalty” over purchases of Russian weapons and energy as well, Trump said.He also unveiled a 50 percent tariff on Brazilian goods, saying its government’s policies and actions threaten US national security.But he delayed its implementation from Friday to August 6 and crucially exempted many products from the prohibitive levy, including orange juice, civil aircraft, iron ore and some energy products.Trump inked an order too for a 50 percent tariff to kick in Friday on goods like copper pipes and wiring, making good on an earlier vow to impose these duties.But the levy, which came after a Commerce Department probe on national security grounds, was less sweeping than anticipated.It left out products like copper ores, concentrates and cathodes, bringing some relief to industry.Meanwhile, Seoul landed a deal with Trump in which South Korean products would face a 15 percent tariff when entering the United States — significantly below a 25 percent level threatened.

Former NBA All-Star Gilbert Arenas was arrested Wednesday along with five others on charges of running illegal “high-stakes” poker games at his mansion in the Los Angeles suburbs, US prosecutors said.The 43-year-old Arenas, who starred for the Washington Wizards, rented out the luxury home that he owned in Encino “for the purposes of hosting high-stakes illegal poker games” between September 2021 and July 2022, according to an indictment unsealed in Los Angeles.The indictment also alleges the gatherings included young women who received tips to “serve drinks, provide massages, and offer companionship” to players.Arenas is charged with one count of conspiracy to operate an illegal gambling business, one count of operating an illegal gambling business, and one count of making false statements to federal investigators.At his arraignment in federal court in downtown Los Angeles on Wednesday afternoon, he pleaded not guilty and was released on $50,000 bond.US Magistrate Judge Jacqueline Chooljian set a trial date of September 23.Those arrested Wednesday also included 49-year-old Yevgeni Gershman, described as a suspected organized crime figure from Israel.According to the indictment, an associate of Arenas, Arthur Kats, staged the house for the poker games at his direction, recruited co-conspirators and collected rent on Arenas’s behalf.Gershman and the three other defendants allegedly ran the illegal “Pot Limit Omaha” poker games in which players were charged a “rake,” either a cut of each pot or a fee per hand.The women servers were allegedly required to pay some of their tips to the organizers, who also provided chefs, valets and armed guards.The indictment includes alleged texts between Arenas and Kats in which the games were set up.Authorities said that in November 2021, Arenas texted Kats a picture of a poker table with “ARENAS POKER CLUB” printed on it, along with an image of a basketball player with an “Arenas” jersey.If convicted, the defendants face a statutory maximum sentence of five years in federal prison for each count.Arenas, a three-time NBA All-Star, last played in the league in 2012 and played for the Shanghai Sharks in China in 2012-13.In December 2009 he was involved in an infamous incident with Washington teammate Javaris Crittenton in which both brought guns into the locker room. Arenas claims their dispute stemmed from a card game.Arenas pleaded guilty to felony gun possession and was suspended for the final 50 games of the 2009-2010 NBA season.

President Donald Trump ordered massive tariffs on Brazil Wednesday and sanctions against the judge overseeing a trial of his far-right ally Jair Bolsonaro, who is accused of attempting a coup in Latin America’s biggest economy.The announcement of 50 percent tariffs saw Trump make good on his threat to wield US economic might to punish Brazil — and its Supreme Court Justice Alexandre de Moraes, in particular — for what he has termed a “witch hunt” against former president Bolsonaro.Brazilian President Luiz Inacio Lula da Silva hit back at the move, saying he would defend “the sovereignty of the Brazilian people in the face of measures announced by the president of the United States.”Unlike other tariffs Trump is slapping on economies around the world, the measures against Brazil have been framed in openly political terms, sweeping aside centuries-old trade ties and a surplus that Brasilia put at $284 million last year. The moves dramatically increased the pressure on Moraes, who has emerged as a powerful and polarizing thorn in the far-right’s side, after clashing repeatedly with Bolsonaro and others over disinformation.Trump’s executive order added a 40 percent tariff on Brazilian products, bringing total trade duties to 50 percent, the White House announced.The order said the new duties would not come into effect for seven days, and listed exemptions on some of Brazil’s major exports — including planes, orange juice and pulp, Brazil nuts, and some iron, steel and aluminum products. The Brazilian government’s “politically motivated persecution, intimidation, harassment, censorship, and prosecution of (Bolsonaro) and thousands of his supporters are serious human rights abuses that have undermined the rule of law in Brazil,” the White House said in a fact sheet announcing the tariffs.It also cited Brazil’s “unusual and extraordinary policies and actions harming US companies, the free speech rights of US persons, US foreign policy, and the US economy,” and singled out Moraes by name.The new duties were announced shortly after the US Treasury slapped sanctions on Moraes, which followed a similar move by the State Department earlier this month. Brazil’s Attorney General Jorge Messias slammed the sanctions as “arbitrary” and “unjustifiable.”Bolsonaro is facing up to 40 years in prison for allegedly plotting a coup to stay in power after losing the 2022 election to leftist Lula.Prosecutors say the plot included a plan to arrest and even assassinate Lula, his vice president Geraldo Alckmin, and Moraes.Brazil has refused to drop the charges, and Trump’s intervention in the case has so far boosted Lula’s popularity.On Wednesday, Human Rights Watch’s Americas director, Juanita Goebertus, declared the US tariffs and sanctions “a clear violation of judicial independence.”- ‘Witch hunt’ -Both US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent issued statements Wednesday announcing the new sanctions against Moraes.”Moraes has taken it upon himself to be judge and jury in an unlawful witch hunt against US and Brazilian citizens and companies,” Bessent said.Rubio, who accused Moraes in his statement of “serious human rights abuses,” also met his Brazilian counterpart, Mauro Viera, on Wednesday. Viera said that Brazil’s judiciary would “not bow to external pressure.”Moraes, 56, has played a controversial role in fighting disinformation.He was an omnipresent figure during the polarizing 2022 election campaign, aggressively using his rulings to fight election disinformation on social media.Last year, he ordered the shutdown of tech titan Elon Musk’s X network in Brazil for 40 days for failing to tackle disinformation shared mainly by Bolsonaro backers.Bolsonaro has called Moraes a dictator, while his son Eduardo had lobbied for US sanctions against the “totalitarian” judge.On Wednesday, Eduardo Bolsonaro said the US action was “not about revenge, it’s about justice.””Abuses of authority now have global consequences,” he wrote on X.The US Treasury cited the Magnitsky Act for the sanctions. It freezes US-based assets and bars travel to the country for foreign officials accused of human rights abuses or corruption.

Meta reported robust second-quarter financial results Wednesday, with revenue jumping 22 percent year-over-year to $47.5 billion as the social media giant continues investing heavily in artificial intelligence.The Facebook and Instagram owner’s share price soared as much as 12 percent in after-hours trading, with investors buoyed by the company’s growing advertising business and a rise in users across its family of platforms.”We’ve had a strong quarter both in terms of our business and community,” said CEO Mark Zuckerberg. “I’m excited to build personal superintelligence for everyone in the world.”Meta posted a net profit of $18.3 billion, compared with $13.5 billion in the same period last year. The results exceeded Wall Street expectations as advertising revenue climbed a stellar 21 percent to $46.6 billion.Meta’s Family of Apps segment, which includes Facebook, Instagram, WhatsApp and Messenger, saw daily active users reach 3.48 billion in June, up 6 percent from a year earlier.The company significantly increased its capital expenditures to $17 billion in the quarter, primarily for AI infrastructure investments. Meta projects total 2025 capital spending between $66 billion and $72 billion.Zuckerberg has embarked on a major AI spending spree, poaching top researchers with expensive pay packages from rivals like OpenAI and Apple as he builds a team to pursue what he calls AI superintelligence.”To win the superintelligence race requires the best of the best talent and Meta’s been on a roll when it comes to recruiting top AI talent. Money talks and Meta has plenty of it,” said Forrester research director Mike Proulx. The big question is whether Wall Street will continue backing the expensive strategy. Meta is locked in a bitter rivalry with other tech behemoths as they invest heavily in AI, aiming to ensure the technology benefits society and generates profits in the not-so-distant future.Most analysts believe Meta will make the investment pay off by improving its advertising efficiency and creating new opportunities, such as with its smart glasses through a partnership with Ray-Ban maker EssilorLuxottica.”Capital expenditures are still shockingly high, but with these strong results, Meta has bought itself more time with investors,” said Debra Aho Williamson, chief analyst at Sonata Insights.However, others signal that Meta’s AI spending spree needs a clearer sense of direction.A strong quarter “won’t shield Meta from questions concerning the company’s future as it breathlessly tries to keep up in the AI race,” said Emarketer analyst Minda Smiley.Another reason that Zuckerberg’s spending bonanza may raise eyebrows is because it echoes his previous leap into spending vast amounts on virtual reality and entering the metaverse, with the CEO even changing the company’s name from Facebook to Meta to reflect the strategy change.The bleeding continued in that segment, with the Reality Labs division, Meta’s virtual and augmented reality unit, posting significant losses. The unit lost $4.5 billion in the quarter on revenue of just $370 million, highlighting ongoing challenges in the metaverse business.- ‘Undeniable’ -Zuckerberg’s AI team is headed by Alexandr Wang, the former CEO of Scale AI, a startup in which Meta invested $14.3 billion at the beginning of the company’s spending blitz in June.Hours before the earnings report, Zuckerberg insisted that the attainment of superintelligence is now “in sight.”In a  post outlining Meta’s AI strategy, Zuckerberg signaled that the remainder of the decade would be a transformative period for artificial intelligence development and that the company’s priority was to bring AI to its users.”There’s no other company that is as good as us at taking something getting it in front of billions of people,” he told analysts.

The United States on Wednesday slapped sanctions on a shipping empire controlled by the son of a top political advisor to Iran’s supreme leader, Ayatollah Ali Khamenei.The Treasury Department said the sanctions were being imposed on companies and vessels operated by Mohammad Hossein Shamkhani, the son of Ali Shamkhani, who has been subject to US sanctions since 2020.It said Hossein operates a fleet of more than 50 tankers and container ships that transport Iranian and Russian oil and petroleum products, generating tens of billions of dollars in profit.”The Shamkhani family’s shipping empire highlights how the Iranian regime elites leverage their positions to accrue massive wealth and fund the regime’s dangerous behavior,” Treasury Secretary Scott Bessent said in a statement.The Treasury Department said more than 115 individuals, corporate entities and vessels were being sanctioned, including companies based in Hong Kong, Singapore, Switzerland, the United Arab Emirates and other countries.”The over 115 sanctions issued today are the largest to-date since the Trump Administration implemented our campaign of maximum pressure on Iran,” Bessent said.The Treasury Department said Hossein’s network “comprises a vast fleet of vessels, ship management firms, and front companies… that launder billions in profits from global sales of Iranian and Russian crude oil and other petroleum products, most often to buyers in China.”The State Department said separately that it was imposing sanctions on 20 entities, including companies in India, Indonesia, Turkey and the UAE, for their involvement in the trade of Iranian petroleum, and 10 vessels.The sanctions are being imposed more than a month after the United States attacked Iran’s nuclear program, hitting a uranium enrichment facility at Fordo, south of Tehran, as well as nuclear sites in Isfahan and Natanz.State Department spokeswoman Tammy Bruce said the sanctions are intended to “disrupt the Iranian regime’s ability to fund its destabilizing activities, including its nuclear program, support for terrorist groups, and oppression of its own people.””As President (Donald) Trump has said, any country or person who chooses to purchase Iranian oil or petrochemicals exposes themselves to the risk of US sanctions and will not be allowed to conduct business with the United States,” Bruce said.She said the United States will continue to put “maximum pressure” on Tehran until it “accepts a deal that advances regional peace and stability and in which Iran forgoes all aspirations of a nuclear weapon.” 

The US Federal Reserve kept interest rates unchanged Wednesday, defying strong political pressure from President Donald Trump to slash borrowing costs — although divisions emerged among policymakers.The central bank’s call to hold interest rates at a range between 4.25 percent and 4.50 percent for a fifth consecutive meeting came with two dissents, marking the first time since 1993 that two Fed governors voted against a rate decision.It also came amid a flurry of data releases this week, including an estimate showing the world’s biggest economy returned to growth in the second quarter.But the uptick was heavily influenced by a pullback in imports after businesses rushed to stockpile inventory in the first quarter ahead of Trump’s expected tariffs.In announcing its decision Wednesday, the Fed cited a moderation in economic activity in the first half of the year and “solid” labor market conditions.It warned however that “uncertainty about the economic outlook remains elevated,” while inflation too is somewhat heightened.Asked about US tariff deals and whether they brought more certainty to policymakers assessing the effects of duties, Fed Chair Jerome Powell said: “It’s been a very dynamic time for these trade negotiations.””We’re still a ways away from seeing where things settle down,” he told a press conference.Trump has also vowed to impose an incoming raft of new tariff rates come Friday.Despite the dissents by Fed governors Christopher Waller and Michelle Bowman, Powell maintained that it had been a “good meeting” with thoughtful arguments around the table.- High-wire act -The dissents by Waller and Bowman, who had preferred a 25 basis points cut, were largely expected by financial markets. Both officials had earlier indicated openness to a July reduction.But KPMG chief economist Diane Swonk said: “We should expect the Fed to become less unified as we get closer to a potential cut in rates.”The hardest challenge for the central bank would be a worsening in employment alongside a pick-up in inflation, she added in a note.”The extent of those shifts is the point of contention and subject to uncertainty. That leaves the Fed in the uncomfortable position of traversing a high wire without a safety net,” Swonk added.It can take anywhere from six to 18 months for the full effects of tariffs to materialize, she said.But Swonk also flagged the “hyper-politicized environment” in which divisions are happening.Trump has lashed out repeatedly at the independent Fed chair for not lowering rates sooner — calling him a “numbskull” and “moron.”The president, citing Wednesday’s GDP figures, earlier said Powell “must now lower the rate.”The repeated attacks have fueled speculation that Trump may attempt to fire Powell or otherwise pressure him to resign early.Powell’s term as Fed chair ends in May 2026, and he defended Wednesday the independence of the central bank as having “served the public well.”- ‘Wait-and-see’ -Powell appears to be opening the door slightly to a September rate cut, although this is not guaranteed, said Navy Federal Credit Union chief economist Heather Long.”He repeatedly described a solid and resilient economy, but he acknowledged there are ‘downside risks’ to the labor market,'” she added in a note.”The July and August job reports will be key for the Fed,” Long said.Official employment numbers for July are due to be released Friday.For now, EY chief economist Gregory Daco warned that “tariff-induced price pressures” are starting to filter through the economy.Companies are citing weaker earnings and higher input costs, while job market conditions are weakening and elevated consumer prices are beginning to weigh on retail sales, he said.Swonk noted that firms which absorbed much of the initial inflation due to tariffs have been cautioning of price hikes too.And Trump has signed more orders Wednesday for fresh tariffs, including on copper products, adding to uncertainty, she said.”We think the uncertainty and balance of risks will push most of the (Fed) to remain in wait-and-see mode at least a few months longer,” said economist Michael Pearce of Oxford Economics.

Technology giant Microsoft on Wednesday said its profit soared above expectations in the recently ended quarter, driven by its cloud computing and artificial intelligence (AI) units.Microsoft reported profit of $27.2 billion on revenue of $76.4 billion, some $29.9 billion of which was brought in by its Intelligent Cloud business.”Cloud and AI is the driving force of business transformation across every industry and sector,” Microsoft chief executive Satya Nadella said in an earnings release.”We’re innovating across the tech stack to help customers adapt and grow in this new era.”Microsoft’s Azure cloud computing offerings brought in more than $75 billion for the company’s fiscal year, which ended on June 30, in an increase of 34 percent from the prior year, according to Nadella.Microsoft shares jumped about 7 percent in after-market trades that followed release of the earnings figures.”This was a slam-dunk quarter for Microsoft with cloud and AI driving significant business transformation across every sector and industry,” Wedbush Securities analyst Dan Ives said in a note to investors.”The company continues to capitalize on the AI Revolution.”Microsoft is well-positioned to make money as increasing numbers of companies ramp up efforts to take advantage of artificial intelligence in their businesses, according to Ives.Microsoft was one of the first tech giants to double down on artificial intelligence when the launch of ChatGPT in 2022 rocked the tech industry.Like its rivals, it has spent massively on building the infrastructure necessary to power the AI revolution, with analysts keeping a close eye on the return on investment.The company in January said it was on track to pump about $80 billion into capital and infrastructure in the fiscal year.Nadella has said finding enough power sources for its AI data center needs was a priority.Microsoft in early July slashed a little less than four percent of its global workforce as it seeks to cut layers of middle management and leverage new technologies.”We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in an email.The job cuts follow a round in May that saw about 6,000 positions culled from its global workforce.The company, which is advancing in its plans to deploy AI across all its products, said it was working to “empower employees to spend more time focusing on meaningful work by leveraging new technologies and capabilities.”