Attention to the Unseen

In an editorial, the Wall Street Journal says: The White House this week opened a new front in its war on the Federal Reserve: a fight about Fed research on the consequences of President Trump’s tariffs. If the tariffs are such an unambiguous economic and political winner, why is the Administration so defensive about them? The flap concerns the analysis we told you about last week by four economists at the Federal Reserve Bank of New York. They found that…

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In the Wall Street Journal, Carol Ryan writes: [D]ebate about how much tax billionaires pay is likely to grow as America’s fiscal situation deteriorates and its wealth gap widens. Data from the Federal Reserve shows that only the richest 1% of households have grown their share of overall U.S. wealth since 1990. Their share hit a record 32% in the third quarter of 2025, equivalent to $54.8 trillion. Gains made by the billionaire class, the very top 0.1% of households…

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Politico reports: White House economic adviser Kevin Hassett on Wednesday said staffers at the New York Federal Reserve should be punished for producing research that found most of President Donald Trump’s tariffs are being paid by U.S. firms and consumers. Hassett on CNBC called the paper, co-authored by four people including the New York Fed’s head of labor and product markets, “an embarrassment” and “the worst paper I’ve ever seen in the history of the Federal Reserve System.” “The people…

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The Guardian reports: UK bank bosses will hold their first meeting to establish a national alternative to Visa and Mastercard, amid growing fears over Donald Trump’s ability to turn off US-owned payment systems. The meeting, chaired by Barclays’ UK chief executive, Vim Maru, will take place this Thursday and bring together a group of City funders that will front the costs of a new payments company to keep the UK economy running if problems were to occur. The City-funded, but…

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Politico reports: Home builders are warning President Donald Trump that his aggressive immigration enforcement efforts are hurting their industry. They’re cautioning that Republican candidates could soon be hurt, too. Construction executives have held multiple meetings over the last month with the White House and Congress to discuss how immigration busts on job sites and in communities are scaring away employees, making it more expensive to build homes in a market desperate for new supply. Beyond the affordability issue, the executives…

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The Wall Street Journal reports: At Monte Cielo, a new housing development in this growing region of South Texas, half-built homes are sitting empty. On a recent day, just a few workers hovered behind temporary wrap tacked to wall frames. The quiet scene comes after federal immigration agents have hit the development repeatedly, carrying out at least half a dozen raids there in recent months, builders said. The most recent was a few weeks ago. Some eight workers were arrested…

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The New York Times reports: Current economic conditions and Trump administration policies could lead to “a widespread collapse of American agriculture,” a bipartisan coalition of former Agriculture Department officials and leaders of farm groups warned in a letter on Tuesday. The letter to the heads and ranking members of the House and Senate agricultural committees was signed by 27 influential figures in the farming sector, including former heads of powerful associations representing corn and soybean farmers and officials from the…

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Paul Krugman writes: So Kevin Warsh will be the next Fed chair. The silver lining to his appointment is that he shouldn’t be able to do much damage, although with one big caveat (see below). The Fed is a republic, not a dictatorship; key decisions are made by a committee in which the chairperson has only one vote. Fed chairs can only drive policy through persuasion — and Warsh lacks the intellectual and moral credibility to be effective on that…

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BBC News reports:The European Union and India have announced a landmark trade deal after nearly two decades of on-off talks, as both sides aim to deepen ties amid tensions with the US. “We did it, we delivered the mother of all deals,” European Commission President Ursula von der Leyen said at a media briefing in Delhi. Indian Prime Minister Narendra Modi called the pact “historic”. It will allow free trade of goods between the bloc of 27 European states and…

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The New York Times reports: Chief executives of Target, Best Buy, General Mills and Cargill were among more than 60 large Minnesota companies to issue a public letter on Sunday calling for an “immediate de-escalation of tensions” in the state. The letter marks the first time the most recognizable businesses in Minnesota have weighed in on the turmoil in Minneapolis amid the aggressive crackdown by federal immigration agents, which have sparked widespread protests throughout the city. It comes one day…

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Fortune reports: As the European Union weighs options to retaliate against President Donald Trump’s latest tariffs, its most potent weapon may be in financial markets. France is already urging the EU to deploy its “anti-coercion instrument,” which can target foreign direct investment and finance as well as trade. That’s after Trump announced new U.S. tariffs on NATO countries that sent troops to Greenland amid his plans to take over the semi-autonomous Danish territory. At face value, a 10% tariff rising…

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Kiel Institut reports: • The 2025 US tariffs are an own goal: American importers and consumers bear nearly the entire cost. Foreign exporters absorb only about 4% of the tariff burden—the remaining 96% is passed through to US buyers. • Using shipment-level data covering over 25 million transactions valued at nearly $4 trillion, we find near-complete pass-through of tariffs to US import prices. • US customs revenue surged by approximately $200 billion in 2025—a tax paid almost entirely by Americans….

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Bloomberg reports: The European Union is in talks to potentially impose tariffs on €93 billion ($108 billion) of US goods if President Donald Trump follows through on his threat to hit European countries with a 10% levy on Feb. 1. The EU is also weighing additional countermeasures beyond the tariffs but will first try to find a diplomatic solution, according to people familiar with the discussions. Representatives from the EU’s 27 countries met Sunday to begin preparing options. EU leaders…

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