aacj

July 31 2025

Economy Clocks 3%; Tariff Deadline Looms; Fed Holds Rates, Defies Trump; Wall Street AI Profits Soar; China Pays Families For Kids

Greg Loving

31 Jul 2025 • 5 min read

Shipping containers at the Port of Los Angeles. PHOTO: MIKE BLAKE/REUTERS

US Economy Clocks 3% 2Q GDP Growth, Beating Forecasts

US Strikes Last-Minute Trade Deals as Tariff Deadline Looms

Fed Holds Interest Rates Steady, Defying Trump's Calls for Cuts and Rare Internal Dissent

Wall Street Rewards Tech Giants' AI Push as Meta, Microsoft Profits Soar

To Combat Population Decline, China to Give Families Annual Cash Payments

1. US Economy Clocks 3% 2Q GDP Growth, Beating Forecasts

Wednesday brought the first official estimate of how much the U.S. economy grew in April through June. Here's what to know: Gross domestic product grew at a 3% rate in the second quarter. That marked a rebound from the January-March quarter, when activity shrank for the first time in three years, at a 0.5% pace. GDP is a broad measure of goods and services produced across the country, and growth is usually quoted using a seasonally and inflation-adjusted annual rate. The second-quarter rate was slightly ahead of the 2.9% estimate from the Atlanta Fed's GDPNow model, which draws on recent economic data. Economists in a Wall Street Journal poll had projected 2.3% growth. But more recent indicators, including a drop in the goods trade deficit for June, pointed to a higher rate. The first-quarter reading was affected by a surge in imports—which subtract from the Commerce Department's GDP calculation—as companies rushed to get ahead of tariffs. Then last quarter, growth got a record boost from exports.

WSJ

2. US Strikes Last-Minute Trade Deals as Tariff Deadline Looms

The clock is ticking for trade deals. President Trump’s deadline for many countries to clinch agreements or face tariff hikes expires just after midnight. Trump and administration officials have said the deadline won't be extended again. The U.S. and South Korea reached a trade deal late Wednesday that will see the Asian country face 15% tariffs, the baseline rate imposed on Japan and the European Union. Korean cars will be included in the 15% tariff rate, news that knocked Hyundai and Kia shares. Trump announced levies of 25% and 50% on goods from India and Brazil, respectively, on Wednesday. The White House also struck deals with Cambodia and Thailand, Commerce Secretary Howard Lutnick said, as well as Pakistan, according to Trump.

WSJ

3. Fed Holds Interest Rates Steady, Defying Trump's Calls for Cuts and Rare Internal Dissent

The Federal Reserve has signalled that it could hold interest rates steady at least through September as it defies Donald Trump’s repeated calls for the central bank to dramatically lower borrowing costs. The central bank left borrowing costs unchanged at 4.25 per cent to 4.5 per cent after a meeting on Wednesday, despite an aggressive campaign by the US president to slash borrowing costs to 1 per cent and continuing uncertainty over the impact of his trade policy on the economy. Fed governors Michelle Bowman and Christopher Waller dissented with the decision, saying the central bank should have cut rates by a quarter percentage point. It marked the first time since 1993 that two governors formally objected to a rate decision. Fed chair Jay Powell said following the meeting that “it seems to me — and to almost the whole committee — that the economy is not performing as though restrictive policy is holding it back inappropriately”.

4. Wall Street Rewards Tech Giants' AI Push as Meta, Microsoft Profits Soar

A. Meta’s shares jumped more than 11 per cent off the back of better than expected earnings and forecasts, adding more than $150bn to its market value in a sign of Wall Street confidence as Mark Zuckerberg doubles down on his big bet on artificial intelligence.

B. Microsoft said its quarterly profits soared thanks to record revenues from its cloud computing division, with its market value poised to pass $4tn as investors reckon its massive investment in artificial intelligence is paying off. Net income increased 24 per cent year on year to $27.2bn, surpassing analysts' expectations for $25.3bn in the fourth quarter of Microsoft’s fiscal year, ending June 30. Emboldened by evidence of AI accelerating earnings, chief financial officer Amy Hood said spending on data centres used to power the technology would increase further in the next 12 months.

5. To Combat Population Decline, China to Give Families Annual Cash Payments

China announced that it will start handing out childcare subsidies across the nation, in its latest push to boost birthrates after a worrying drop in recent years. The government will spend 3,600 yuan ($502) a year per child under age three, according to the official Xinhua News Agency. The assistance, effective retrospectively from Jan. 1 this year and available regardless of the first-, second- or third-child, is meant as an incentive for young couples wary of rising costs of child-rearing. The policy is expected to benefit more than 20 million families each year, Xinhua reported. China has previously offered tax breaks and has been working to offer more affordable daycare services, it said. The latest measure follows China’s population shrinking for a third straight year in 2024. New births at 9.54 million last year was only half of the 18.8 million registered in 2016 when China lifted its one-child policy.

Bloomberg

July 31, 1975: Labor leader Jimmy Hoffa is reported missing

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