FT News Briefing Making sense of a wonky GDP reading
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Jul 31, 2025 Meta’s stock surged over 10% after a strong earnings report, boosting investor confidence. Meanwhile, the Federal Reserve decided to hold interest rates steady, defying calls from Donald Trump for lower rates. In contrast, U.S. copper prices dropped following Trump’s tariff exemptions on refined materials. HSBC reported a staggering 29% decline in profits, impacted by restructuring and losses linked to its Hong Kong operations. The discussion highlights the turbulent economic landscape and the bank's strategy shift towards Asia and affluent clients.
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Tariffs Distort U.S. GDP Readings
- U.S. GDP swings in Q1 and Q2 were heavily distorted by Trump's tariffs impacting imports.
- First quarter contraction and second quarter surge reflect tariff-driven trade shifts, not pure economic health.
Average GDP Reveals Economic Slowdown
- Averaging GDP figures across quarters provides a clearer view of U.S. economic growth.
- The first half of 2019 shows slower underlying growth despite Q2 volatility.
Fed Holds Rates Amid Uncertainty
- The Fed is cautiously waiting to assess tariff impacts on inflation and growth.
- Labor market strength supports holding rates steady despite slowed growth.