Good morning. Andrew here. I’m back from Davos, Switzerland, just in time for a storm that has blanketed much of the East Coast, and as the latest shooting by federal agents in Minneapolis raises serious concerns throughout the country. Occasionally in this space, I have raised questions about how the business community uses its voice. In recent years, that group has gone largely silent on issues deemed “too political.” But at some point, business leaders — not just those in Minneapolis — need to raise their hands. They don’t have to do it individually; they can do it collectively, as the Minnesota Chamber of Commerce has done. (More on that below.) Whatever your politics, we can all agree that federal agents shouldn’t be killing U.S. citizens except in the most dangerous circumstances. Even if you believe an officer acted in good faith or out of fear for his or her life, the frequency of these episodes suggests a systemic training failure. “Training” is something the business world understands intimately. If any company had failures of this magnitude twice in three weeks, any competent C.E.O. would step back — not necessarily to abandon the strategy, but at least to rethink it. Will leaders who speak out against the administration face political blowback? Yes, we’ve seen it before. But some C.E.O.s have shown courage and done so anyway: Jamie Dimon, for instance, said in Davos last week, “I don’t like what I’m seeing, five grown men beating up a little old lady.” For those who have President Trump’s ear, who justify their public silence by being-in-the-room with the president: Are they using that proximity in private moments to tell him this needs to be fixed? None of this is to suggest that we shouldn’t police illegal immigration or arrest people who assault others. But just as businesses do, this must be done with a process in place, in accordance with the law and with accountability. It is clearly evident from the past few weeks that we don’t have the right process in place right now. (Was this newsletter forwarded to you? Sign up here.)
What should business do?Outrage over the Trump administration’s immigration crackdown in Minnesota, especially over the shooting of Alex Jeffrey Pretti, the second person killed by federal agents in Minneapolis this month, has only continued to build. Many Trump administration officials have gone on the offensive, calling Pretti, without evidence, a “domestic terrorist” and blaming Democrats and protesters for heightening tensions. But some Republican lawmakers have raised concerns. One of the big questions now for businesses, both in Minnesota and nationwide, is what the economic and moral fallout might be — and whether to say anything about it. Some business leaders are speaking out. The C.E.O.s of more than 60 big Minnesota companies (including Target, Best Buy, 3M and Cargill) yesterday issued a public letter, shared by the Minnesota Chamber of Commerce, calling for “an immediate de-escalation of tensions” in the state. The executives wrote that they had been in touch with federal, state and local officials — but didn’t call for specific action or condemn the shooting of Pretti. (Nor did they call on protesters to change their behavior.) Josh Bolten, the head of the Business Roundtable, the influential collection of national business leaders, then said in a separate statement that he supported the Minnesota letter. Other prominent figures have been more forceful, as Business Insider noted:
What’s the economic fallout? Many local Minneapolis businesses had already closed on Friday, before Pretti was killed, in solidarity with protests in the Twin Cities area. But it’s unclear whether there will be more sustained pressure campaigns on businesses nationwide over their response, or lack of one. Target knows the cost of political pressure, having taken heat over its rollback of D.E.I. programs and over some Pride Month merchandise. (Some workers have skipped shifts to protest detentions of fellow employees.) There’s a potentially bigger showdown looming. Top Democratic lawmakers vowed to oppose government funding legislation that would provide $64.4 billion for the Department of Homeland Security, including $10 billion for ICE. Senate Republicans are examining whether to separate out the homeland security funding from the rest of the bill to avoid a partial federal shutdown this week.
The U.S. dollar slumps, while gold and the yen soar. The greenback hit a four-month low and gold reached a record today, as traders speculated that the New York Fed and Tokyo could jointly intervene to bolster Japan’s currency and bond market. Given the highly unusual nature of such a move, analysts are forecasting more market volatility that could weaken the dollar further as the “sell America” debate continues. E.U. regulators announce an investigation into Elon Musk’s X. The authorities said today that the social network did not do enough to prevent users from abusing the Grok chatbot to digitally disrobe images of women and children. It’s the latest legal run-in between X and the European Union over the bloc’s tough content rules, but this one could drastically escalate a clash between the Trump administration, its backers in Silicon Valley and Brussels over European digital regulations. The Fed and tech earnings are in focus this week. The central bank is expected to leave interest rates unchanged at its meeting on Wednesday. But expect Jay Powell, the Fed chair, to field questions on the institution’s independence amid President Trump’s attacks. Elsewhere, investors will scrutinize the latest quarterly results from Meta and Microsoft (on Wednesday) and Apple (Thursday), over the costs of their artificial intelligence work. An H-1B visa headacheEven before the fatal shootings by federal agents in Minneapolis, and the protests and vigils that came after, the fallout from President Trump’s immigration crackdown was risky for businesses. Trump’s moves to cut university research funding and increase the price of a key employment visa have already prompted some overseas students and professionals to rethink pursuing a career in the U.S., Vivienne Walt reports. Many American business leaders fear the effects could outlast Trump, and put the country at a competitive disadvantage. “We’re potentially losing access to the best and brightest minds from around the world who have emigrated to America, who have created just a tremendous number of jobs,” Ken Griffin, the C.E.O. of Citadel and a prominent Republican donor, said last week at the World Economic Forum in Davos, Switzerland. “The majority of the A.I. start-ups are run by either immigrants or the children of immigrants,” he added. Wall Street and Big Tech are especially worried about Trump’s H-1B visa policy. The temporary permit for highly skilled workers has kick-started several American success stories, like those of Elon Musk and Sundar Pichai, Google’s C.E.O. Under a new rule finalized last month, the Department of Homeland Security has lifted the application fee for an H-1B visa to $100,000, from as low as $2,000 fee, and has drastically limited how many it will approve. The U.S. Chamber of Commerce sued the government in October, arguing that smaller businesses could not afford the new fee. It lost in court last month. The policy change has already scrambled recruitment efforts. Tech companies and Wall Street firms have shifted some jobs abroad, especially to Mumbai and Bengaluru in India, hotbeds of artificial intelligence talent. The Indian government has introduced tax breaks and other incentives to attract high-skilled workers returning from the U.S. “It is making India self-reliant,” Ankita Singh, an immigration lawyer in New Delhi, told DealBook. “Students who used to go to the U.S. are able to work for global employers in India.” Other countries, including in Europe, hope to capitalize, too. “Europe sees this as a great opportunity to attract talent that would otherwise go to the U.S.,” Jasmijn Slootjes, a deputy director at the Migration Policy Institute, told DealBook.
Winter wipeoutTravel chaos, power outages across multiple states, businesses and schools closed: Much of the U.S. has been paralyzed by a monster winter storm. And the deep freeze is not over yet. Here’s the latest:
The economic cost is expected to soar. The storm could inflict up to $115 billion of damage and loss, according to AccuWeather. (Winter-related insurance losses have steadily increased in recent years.) The storm has slammed natural gas production in the U.S., pushing natural gas prices to above $6.20 per million British thermal units this morning, a multiyear high. It could be a major test for data centers and other power-hungry businesses. As the temperature dips, demand for power is expected to climb more broadly, raising the risks for more outages. How have New York and its new mayor fared? The storm was seen as an early test of Zohran Mamdani’s nascent administration. So far, even critics are giving him a decent grade. The affordability crunchAmericans are deeply pessimistic about their economic future, a new Times/Siena poll finds. Essentials of a middle class life — housing and education — have become so expensive that a majority of Americans feels they are no longer affordable. The conundrum was a dominant theme during the 2024 elections, and it is expected to loom over the midterms as well.
From the report: Rising costs have shifted perceptions of America as a place of upward economic mobility dominated by a comfortable middle class. Two-thirds of voters said they now think a middle-class lifestyle is out of reach for most people, and 77 percent say it has gotten harder to achieve than a generation ago. President Trump has taken notice. In recent weeks, he has announced a slew of executive orders and made a number of social media posts aimed at addressing the rising cost of living, after playing down the issue. Trump’s proposals carry major ramifications for the business world. Banks say a 10 percent cap on credit card interest rates, which the president called for this month, would clobber the lending industry. And he has moved to bar Wall Street investors from buying single-family homes. The president has also requested that Fannie Mae and Freddie Mac, the government-controlled finance firms, buy up to $200 billion in mortgage-backed bonds. Experts predict that could nudge 30-year mortgage rates lower, but that it |
