US economic growth slowed through the first half of the year as consumers reduced spending and companies sought to inoculate themselves from the Trump administration’s frequent and unpredictable shifts in trade policy.

Inflation-adjusted gross domestic product, which measures the value of goods and services produced in the US, increased an annualized 3% in the second quarter, according to the US government. But as solid as the pace was, economic growth averaged 1.25% in the first half, a full percentage point below the pace for 2024.

Because swings in trade and inventories have distorted overall GDP this year, economists are paying closer attention to final sales to private domestic purchasers, a narrower metric of demand. This measure rose at a 1.2% pace in the second quarter, the slowest since the end of 2022.

“The trend of cooling demand is very clear over the past two quarters, and growth now appears to be slipping below its longer-term potential pace,” Scott Anderson, chief US economist at BMO Capital Markets, said in a note. “We believe this will soon give the [Federal Open Market Committee] the room to start cutting interest rates again before too long.” —David E. Rovella

What You Need to Know Today

Maybe not too long, but definitely not today. Despite months of public pressure, threats and all-caps social media attacks from Donald Trump, Federal Reserve Chair Jerome Powell said interest rates are in the right place to manage continued uncertainty around tariffs and inflation as the central bank kept rates steady.

“There are many, many uncertainties left to resolve,” Powell said Wednesday following the central bank’s decision to keep rates unchanged. “It doesn’t feel like we are very close to the end of that process.”

The FOMC voted 9-2 to hold its benchmark federal funds rate in a range of 4.25%-4.5%, as they have at each of their meetings this year. Governors Christopher Waller and Michelle Bowman—both Trump appointees—voted against the decision in favor of a quarter-point cut.

The slowing economy was a big reason for the continued caution. Meanwhile the US president’s desire for rate cuts and his public musings about firing Powell, likely an illegal move that would trigger litigation, has already unmoored global confidence in the future independence of the Fed.

Trump is making new threats in his trade war (and backing off some, too). He now promises a 25% tariff on India’s exports to the US starting Aug. 1 while threatening an additional penalty over the country’s energy purchases from Russia.

Trump, 79, claimed Tuesday in a social media post that India has tariffs that are “among the highest” in the world. The Republican however has repeatedly threatened tariffs and then backed down, ostensibly as party of a negotiating strategy. Plus the overall legality of Trump’s global trade war is the subject of litigation before the US Court of Appeals in Washington. 

For its part, India had been among the first to engage Washington in talks, following Narendra Modi’s high-profile White House visit in February. India and the US had already finalized terms of reference for a bilateral trade accord in April, with both sides committing to a fall deadline. Before Trump’s latest statement, officials in New Delhi had said they would continue negotiating with the US on the earlier framework. Now that may be up in the air.

Copper prices collapsed Wednesday by more than 19% in just minutes after Trump retreated from his broad-based threat to impose tariffs on copper. He instead sought to exclude the most widely imported form of the metal from his threatened levies.

US copper futures on Comex plunged after the announcement in the largest intraday fall on record. Until Wednesday afternoon, US copper prices had been trading around 28% above benchmark copper futures on the London Metal Exchange, as traders anticipated the tariff would be applied to all refined metal imports.

The decision is the latest surprise from Trump to upend the copper market. When he first flagged the likelihood of tariffs early this year, he triggered a surge in US copper prices relative to the rest of the world and set off a race to ship copper to the US to beat any tariffs. That delivered substantial profits to some of the world’s biggest metals traders.

Actor Samuel L. Jackson joined a campaign by Swedish energy company Vattenfall to promote offshore wind farms, marking the latest area of disagreement between the Hollywood star and Trump, who appears to be no fan of wind energy.

Actor Samuel L. Jackson in a campaign by Swedish energy company Vattenfall. Source: Vattenfall AB

“These giants are standing tall against fossil fuels—rising up out of the ocean like a middle finger to CO2,” Jackson says in a one-minute video released by Vattenfall Wednesday, a day after the US president called “windmills” a “disgrace” during a visit to his Scotland golf course. 

What You’ll Need to Know Tomorrow

For Your Commute

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