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The Dow Jones Industrial Average plunged more than 500 points on Tuesday after hot inflation data for January dimmed hopes that the Federal Reserve would begin cutting interest rates next month.

The Dow, which tumbled as 750 points, slid 1.4% — its worst day since since March 2023. The S&P 500 slipped 1.4%, while the tech-heavy Nasdaq Composite fell 1.8%.

Both the Dow and the S&P 500 had hit record highs this year before plunging following the release of the Consumer Price Index, which rose a stiffer-than-expected 3.1% on an annual basis.

The figure — which tracks changes in the costs of everyday goods and services — remains far off from the Fed’s 2% target.

Core CPI a number that excludes volatile food and energy prices increased 0.4% in January, to 3.9%.

The figure, a closely-watched gauge among policymakers for long-term trends, was also higher than what economists anticipated.

“Inflation staying sticky is everyone’s biggest fear and this report is showing its not going down,” Chris Zaccarelli, the chief investment officer of Independent Advisor Alliance, said. “The knee- jerk reaction is for stocks and bonds to sell off. That makes sense. Then we’ll wait for the next report and if that’s lower this will turn out to be just a blip.”

The increase could delay the prospect of three interest rate cuts the Fed anticipates to make in 2024.

Wall Street had initially expected that the first time rates were brought down from their current 22-year high would be in March.

Fed Chair Jerome Powell said after the latest policy meeting that “it’s not likely that this committee will reach that level of confidence in time for the March meeting.”

The CME FedWatch Tool shows that a May rate is also largely off the table.

The probability of a May rate cut slumped from 52.2% to 36.6% on Monday while the chance of a slash in June now stands at 78.6%, down from 92.2%.

Atlanta Fed President Raphael Bostic, who is voting on the Federal Open Market Committees policy decisions this year, told CNN that he’s anticipating the first of three cuts to take place in the fourth quarter — weeks after the mid-year slowdown Wall Street is now expecting.

By the end of the year, inflation will be near “the lower twos,” he said.

This isnt a TikTok video or something like that where you get trends happening so fast. It takes a while for the decisions of individual decisions and millions of people to come together and to start to create trends, he told CNN.

At the same time, theres a significant risk if the Fed leaves interest rates where they currently are for too long, Bostic warned.

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He also noted how difficult it’s been to tamp down inflation as the job market has remained surprisingly strong.

Januarys monthly jobs report added a blockbuster 353,000 new jobs to the economy — nearly double analysts’ expectations. 

Although inflation appears to be slowing, the economy remains Americans overall top concern, cited by 22% of poll respondents, as they have struggled with inflation and other aftershocks of the COVID-19 pandemic, according to a Reuters/Ipsos poll released last month.

Since taking office, Biden has made a pitch for lower supermarket prices, pushed drug makers to lower insulin costs, hotel chains to reduce fees and tried to diversify the meat-packing industry after beef prices skyrocketed in the aftermath of the pandemic.

Alfredo Ortiz, president and CEO of Job Creators Network, told The Post in a statement that “inflation remains historically high and is nothing to cheer about.”

“Talk to any American going to the grocery store, hardware store or pharmacy, and they’ll tell you prices continue to rise at a painful rate.”

A December 2023 report on shrinkflation — when businesses cut product sizes but keep prices the same — found that household paper products were 34.9% more expensive per unit than they were in January 2019, with about 10.3% of the increase due to producers shrinking the sizes of rolls and packages.

Researchers also found that the price of snacks like Oreos and Doritos had gone up 26.4% over the same period, with shrinking portions accounting for 9.8% percent of the increase.

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Politics

Unite votes to suspend Angela Rayner over Birmingham bin strike

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Unite votes to suspend Angela Rayner over Birmingham bin strike

Labour’s largest union donor, Unite, has voted to suspend Deputy Prime Minister Angela Rayner over her role in the Birmingham bin strike row.

Members of the trade union, one of the UK’s largest, also “overwhelmingly” voted to “re-examine its relationship” with Labour over the issue.

They said Ms Rayner, who is also housing, communities and local government secretary, Birmingham Council’s leader, John Cotton, and other Labour councillors had been suspended for “bringing the union into disrepute”.

There was confusion over Ms Rayner’s membership of Unite, with her office having said she was no longer a member and resigned months ago and therefore could not be suspended.

But Unite said she was registered as a member. Parliament’s latest register of interests had her down as a member in May.

Politics latest: Italy and other EU countries have ‘huge doubts’ about legality of UK migrant deal

The union said an emergency motion was put to members at its policy conference in Brighton on Friday.

More on Angela Rayner

Unite is one of the Labour Party’s largest union donors, donating £414,610 in the first quarter of 2025 – the highest amount in that period by a union, company or individual.

The union condemned Birmingham’s Labour council and the government for “attacking the bin workers”.

Mountains of rubbish have been piling up in the city since January after workers first went on strike over changes to their pay, with all-out strike action starting in March. An agreement has still not been made.

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Rat catcher tackling Birmingham’s bins problem

Ms Rayner and the councillors had their membership suspended for “effectively firing and rehiring the workers, who are striking over pay cuts of up to £8,000”, the union added.

‘Missing in action’

General secretary Sharon Graham told Sky News on Saturday morning: “Angela Rayner, who has the power to solve this dispute, has been missing in action, has not been involved, is refusing to come to the table.”

She had earlier said: “Unite is crystal clear, it will call out bad employers regardless of the colour of their rosette.

“Angela Rayner has had every opportunity to intervene and resolve this dispute but has instead backed a rogue council that has peddled lies and smeared its workers fighting huge pay cuts.

“The disgraceful actions of the government and a so-called Labour council, is essentially fire and rehire and makes a joke of the Employment Relations Act promises.

“People up and down the country are asking whose side is the Labour government on and coming up with the answer not workers.”

SN pics from 10/04/25 Tyseley Lane, Tyseley, Birmingham showing some rubbish piling up because of bin strikes
Image:
Piles of rubbish built up around Birmingham because of the strike over pay

Sir Keir Starmer’s spokesman said the government’s “priority is and always has been the residents of Birmingham”.

He said the decision by Unite workers to go on strike had “caused disruption” to the city.

“We’ve worked to clean up streets and remain in close contact with the council […] as we support its recovery,” he added.

A total of 800 Unite delegates voted on the motion.

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World

Donald Trump announces 30% tariff on imports from EU

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Donald Trump announces 30% tariff on imports from EU

Donald Trump has announced he will impose a 30% tariff on imports from the European Union from 1 August.

The tariffs could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US.

Mr Trump has also imposed a 30% tariff on goods from Mexico, according to a post from his Truth Social account.

Announcing the moves in separate letters on the account, the president said the US trade deficit was a national security threat.

In his letter to the EU, he wrote: “We have had years to discuss our trading relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, trade Deficits, engendered by your tariff, and non-Tariff, policies, and trade barriers.

“Our relationship has been, unfortunately, far from reciprocal.”

In his letter to Mexico, Mr Trump said he did not think the country had done enough to stop the US from turning into a “narco-trafficking playground”.

The president of the European Commission, Ursula von der Leyen, said today that the EU could adopt “proportionate countermeasures” if the US proceeds with imposing the 30% tariff.

Ms von der Leyen, who heads the EU’s executive arm, said in a statement that the bloc remained ready “to continue working towards an agreement by Aug 1”.

“Few economies in the world match the European Union’s level of openness and adherence to fair trading practices,” she continued.

“We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”

Ms von der Leyen has also said imposing tariffs on EU exports would “disrupt essential transatlantic supply chains”.

Meanwhile, Dutch Prime Minister Dick Schoof said on the X social media platform that Mr Trump’s announcement was “very concerning and not the way forward”.

He added: “The European Commission can count on our full support. As the EU we must remain united and resolute in pursuing an outcome with the United States that is mutually beneficial.”

Mexico’s economy ministry said a bilateral working group aims to reach an alternative to the 30% US tariffs before they are due to take effect.

The country was informed by the US that it would receive a letter about the tariffs, the ministry’s statement said, adding that Mexico was negotiating.

Read more US news:
Trump plans to hit Canada with 35% tariff
More than 160 missing after Texas floods
Robot performs realistic surgery

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How ‘liberation day’ unfolded

Trump’s tariff threats and delays

On his so-called “liberation day” in April, Mr Trump unleashed “reciprocal tariffs” on many of America’s trade partners.

The US president said he was targeting countries with which America has a trade imbalance.

However, since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.

The US imposed a 20% tariff on imported goods from the EU in April but it was later paused and the bloc has since been paying a baseline tariff of 10% on goods it exports to the US.

In May, while the US and EU where holding trade negotiations, Mr Trump threated to impose a 50% tariff on the bloc as talks didn’t progress as he would have liked.

However, he later announced he was delaying the imposition of that tariff while negotiations over a trade deal took place.

As of earlier this week, the EU’s executive commission, which handles trade issues for the bloc’s 27-member nations, said its leaders were still hoping to strike a trade deal with the Trump administration.

Without one, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.

Continue Reading

US

Donald Trump announces 30% tariff on imports from EU

Published

on

By

Donald Trump announces 30% tariff on imports from EU

Donald Trump has announced he will impose a 30% tariff on imports from the European Union from 1 August.

The tariffs could make everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the US.

Mr Trump has also imposed a 30% tariff on goods from Mexico, according to a post from his Truth Social account.

Announcing the moves in separate letters on the account, the president said the US trade deficit was a national security threat.

In his letter to the EU, he wrote: “We have had years to discuss our trading relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, trade Deficits, engendered by your tariff, and non-Tariff, policies, and trade barriers.

“Our relationship has been, unfortunately, far from reciprocal.”

In his letter to Mexico, Mr Trump said he did not think the country had done enough to stop the US from turning into a “narco-trafficking playground”.

The president of the European Commission, Ursula von der Leyen, said today that the EU could adopt “proportionate countermeasures” if the US proceeds with imposing the 30% tariff.

Ms von der Leyen, who heads the EU’s executive arm, said in a statement that the bloc remained ready “to continue working towards an agreement by Aug 1”.

“Few economies in the world match the European Union’s level of openness and adherence to fair trading practices,” she continued.

“We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”

Ms von der Leyen has also said imposing tariffs on EU exports would “disrupt essential transatlantic supply chains”.

Meanwhile, Dutch Prime Minister Dick Schoof said on the X social media platform that Mr Trump’s announcement was “very concerning and not the way forward”.

He added: “The European Commission can count on our full support. As the EU we must remain united and resolute in pursuing an outcome with the United States that is mutually beneficial.”

Mexico’s economy ministry said a bilateral working group aims to reach an alternative to the 30% US tariffs before they are due to take effect.

The country was informed by the US that it would receive a letter about the tariffs, the ministry’s statement said, adding that Mexico was negotiating.

Read more US news:
Trump plans to hit Canada with 35% tariff
More than 160 missing after Texas floods
Robot performs realistic surgery

Please use Chrome browser for a more accessible video player

How ‘liberation day’ unfolded

Trump’s tariff threats and delays

On his so-called “liberation day” in April, Mr Trump unleashed “reciprocal tariffs” on many of America’s trade partners.

The US president said he was targeting countries with which America has a trade imbalance.

However, since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.

The US imposed a 20% tariff on imported goods from the EU in April but it was later paused and the bloc has since been paying a baseline tariff of 10% on goods it exports to the US.

In May, while the US and EU where holding trade negotiations, Mr Trump threated to impose a 50% tariff on the bloc as talks didn’t progress as he would have liked.

However, he later announced he was delaying the imposition of that tariff while negotiations over a trade deal took place.

As of earlier this week, the EU’s executive commission, which handles trade issues for the bloc’s 27-member nations, said its leaders were still hoping to strike a trade deal with the Trump administration.

Without one, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes.

Continue Reading

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