Tariffs and energy costs squeeze Main Street
Small business owners across America report that tariff-driven supply chain disruptions and higher energy prices have eroded their profit margins to dangerous levels. The New York Times reports that many companies say they have been forced to raise prices, reduce staff, or both. The National Federation of Independent Business noted that optimism among small business owners has fallen to multi-year lows as they navigate an environment where input costs keep rising while consumer spending shows signs of wavering.
Fed holds rates, hints at possible hike
The Federal Reserve held interest rates at 3.75% following its June meeting, citing the need for more data on how the Iran conflict and trade policy are affecting the economy. Chair Jerome Powell indicated that while inflation has moderated from its peaks, upward pressure from energy costs could force the Fed to raise rates later this year. Mortgage rates edged lower on easing Iran tensions, but the prospect of a Fed rate hike clouded the outlook for housing and business investment.
FERC wades into data center power fight
The Federal Energy Regulatory Commission jumped into the growing battle over data center grid connections, as technology companies demand more electricity for AI computing. The agency is examining whether data centers should get priority access to the power grid, a move that critics say could raise electricity costs for households and small businesses. The fight reflects a broader tension between the tech industry's insatiable energy appetite and the needs of other ratepayers.