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The Fed Isn’t Rushing to Save the Markets This Time

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The Fed Isn’t Rushing to Save the Markets This Time

The notion that the Federal Reserve will rush in to rescue investors in a crisis has comforted investors for decades. But in the big market downturn induced by President Trump’s tariffs, no Fed rescue is in sight.

Jerome H. Powell, the Federal Reserve chair, made that clear on Friday. The tariffs are much “larger than expected,” he said, and their immense scale makes it especially important for the central bank to understand their economic effects before taking action.

“It is too soon to say what will be the appropriate path for monetary policy,” he said at a conference in Virginia.

In fact, I’d say, the likelihood of further market declines is much greater than the chance that the Fed will turn the markets around in the immediate future.

What U.S. stock investors have experienced until now is what’s known on Wall Street as a correction — a decline of 10 percent or more from a market peak. The correction doesn’t end, by this common definition, until the markets have turned around and that peak has been surpassed. For days, though, the market momentum has been almost entirely downward. So another dubious distinction is in sight: a bear market, which is a decline of at least 20 percent from a market top. For the S&P 500, which closed at 5,074.08 on Friday, down from its peak of 6,144.15 on Feb. 19, a bear market is already within shouting distance, a scant 2.6 percentage points away.

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It would be lovely to be able to say that the stock market bottom is near, or that it has already been reached, Edward Yardeni, a veteran market watcher, said in a conversation on Friday.

“I’ve been pretty good at picking market bottoms, and I’m not shy about calling one when I see one,” he said. “But that usually has happened when the Fed has taken action. And right now, its pretty clear that Powell won’t be doing that.”

The Fed is holding back this time for good reasons. The impact of the sudden new range of tariffs imposed by the president — and the tit-for-tat tariffs announced on Friday by China that are likely to be followed by similar moves from a host of other countries — is far from clear.

But this much is certain. Tariffs are a tax, one that is likely to slow economic growth as well as raise prices. Those effects complicate the task of the Fed, which has a dual mandate: promoting full employment (and economic growth) and holding the rate of inflation down to a reasonable level.

With the Fed still battling inflation after the runaway surge in prices of 2022 and 2023, it is reluctant to lower interest rates when price increases in a range of goods could be just around the corner. And on Friday, the latest jobs report from the government showed that the economy in March remained reasonably strong. Employers added 228,000 jobs for the month, far more than anticipated, and while the unemployment rate rose slightly, to 4.2 percent from 4.1 percent, there were few signs of substantial weakness.

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Given that backdrop, Mr. Powell seemed to be signaling that it would take an actual slowdown, with substantial job declines, to justify rate cuts under current circumstances. Consumer confidence has declined, and an Economic Policy Uncertainty Index that is closely watched by economists and business executives has soared. But concrete data isn’t here yet. If they’re not rolled back, the tariffs are likely to take a while to result in widespread layoffs — and without strong evidence of a slowdown, the Fed may be reluctant to act.

Yet the Fed has already come under pressure from President Trump to lower interest rates. This is the “PERFECT time” for a Fed rate cut, he said on the Truth Social media platform on Friday, shortly before Mr. Powell’s speech. Maintaining Fed independence is important in the markets, and there was no indication that this overt presidential pressure had any effect on Mr. Powell’s staunch resolve to bide his time, and to lower interest rates only when and if the Fed decided it was time to do so.

So investors may need to be very patient, and to hope that changes in tariff policy occur rapidly enough in Washington to turn the markets around and, more important, avert a recession. Recessions are typically associated with wide-ranging job losses, and they cause immense hardship in the real world as well as in financial markets.

Recessions usually make bear markets much worse, Ned Davis Research, an independent financial research firm, has found. Bear markets accompanied by recessions had a median duration of 528 calendar days and a market decline of 32.8 percent, the firm has found, using Dow Jones industrial average data since 1900. Bear markets that occurred without recessions had a median duration of 224 days and a decline of 23.3 percent.

“Bear markets are unfortunate whenever they occur, but they tend to be much worse if there’s also a recession,” Ed Clissold, chief U.S. strategist at Ned Davis Research, said in an interview.

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Yet the Trump tariffs, which would be the steepest in a century if fully carried out, have already set off a global trade war. The president could reverse himself, remove most of the tariffs and try to undo some of the damage, but there are no signs that he’s planning to do so. In the meantime, the chances of a recession and of further market declines have been growing.

Mr. Yardeni said that while he remained optimistic about the long-term prospects for the United States, fear, confusion and uncertainty over President Trump’s tariff policy make him less positive about the next year. The chances of “stagflation” — a dreaded combination of high inflation and a slowing economy — are now 45 percent in the next 12 months, up from 35 percent one month ago, he said, and that wouldn’t help the stock market.

Goldman Sachs says there’s now a 35 percent chance of a recession in the next year, and late in March it ratcheted down its estimate for the S&P 500, projecting a 5 percent price decline over the next three months. At the start of the year, Goldman was rampantly bullish, forecasting a 16 percent increase in the S&P 500 over the course of 2025. If the market falls much further, Goldman and other market strategists are likely to revise their estimates still lower. JPMorgan has already raised the odds of a global recession this year to 60 percent.

As I’ve pointed out in recent columns, though, bonds have been performing well this year, easing some of the pain for investors, and international stock markets have done better than the U.S. ones, although they, too, have been battered as the reality of a new world of higher tariffs has sunk in. Old-fashioned low-cost diversified investing — I practice it using index funds that track virtually all tradable global markets — has eased some of the pain this year.

But in a full-blown recession and a bear market, few people will be entirely spared. Eventually, markets rebound, and those with long horizons are likely to prosper, regardless of what happens in the next few weeks.

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Some market declines are blessedly brief. But in the bear market that started in October 2007, during the great recession of that period, it took more than four years, including dividends, for investors in the S&P 500 to climb back to the peak of their holdings in that index.

Even so, it was worth hanging on, for those who were able to do so.

Since the 2007 market peak, the S&P 500 has had a total return of more than 356 percent, even including the latest market declines. Staying in the market has paid off over the long run, and it’s likely to do so again. But sticking with it, even in times like these, can be tough. You need strength and plenty of patience to be a long-term investor.

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Angry Ferrari fans say the Italian company’s new EV is too Californian

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Angry Ferrari fans say the Italian company’s new EV is too Californian

Ferrari’s first-ever fully electric vehicle triggered some fans who said it looks more like an iPhone than an Italian supercar.

The $640,000 Ferrari Luce, which was unveiled on Wednesday, looks like a distant relative of many Apple products. It was built with the help of Jony Ive, the person who designed the look and feel of the Cupertino company’s iPhone, iPod and Macintosh through 2019.

“Legend has it that if you pull the Ferrari badge off the side of the new Luce you see an Apple logo underneath,” one user wrote on X.

A meme circulated portraying the Luce with iPhone applications photo-shopped onto the top, and another showing the car upside down and plugged into an iPhone charger.

To accommodate more batteries and seats, the new EV is bigger and boxier than most classic Ferraris. Ive’s design firm, LoveFrom, which he started in San-Francisco after leaving Apple, was brought in to try to meld the traditions of Ferrari with the new functionality and form allowed by a battery-powered engine.

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In a marketing video, Ferrari’s chief design officer, Flavio Manzoni, said he sees the Luce “acting as a bridge between San Francisco and Maranello,” the northern Italian city where Ferrari is headquartered.

The four-door, five-seat car comes onto the scene at a difficult moment for electric vehicles, an industry that has been battered by President Trump’s policies.

Trump has cut EV incentives for manufacturers and customers, prompting several major automakers to move away from EV efforts and focus on gas-powered options.

A luxury EV effort from Sony and Honda, a high-tech vehicle dubbed Afeela, was shut down before it ever hit the road due to Honda paring back its EV offerings.

Legacy automakers such as Ferrari face a particularly difficult landscape for launching an EV, as die-hard fans are attached to traditional, gas-powered models.

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Ferraris are known for roaring engines and bold, angular designs, a far cry from the smooth, rounded exterior of the Luce.

To be sure, aggressive redesigns often attract ridicule. The early electric Mustang models were shunned by some but have become popular.

One X user posted a meme with a photo of fictional Italian gangster Tony Soprano saying, “I don’t want any California bulls—.”

The online launch page for the car emphasizes that the Luce is “100% Ferrari.”

Still, Luca di Montezemolo, Ferrari’s former chairman, told reporters on Tuesday that the automaker is “risking the destruction of a legend.”

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Ferrari shares have fallen about 8% since the launch of the Luce, signaling investors’ concerns that the car won’t resonate with customers.

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Donald E. Newhouse, newspaper publisher and heir to media empire, dies at 96

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Donald E. Newhouse, newspaper publisher and heir to media empire, dies at 96

Donald E. Newhouse, president of one of the largest family-controlled publishing companies in the nation and a former board chairman of the Associated Press, died Tuesday. He was 96 and died at his home in New Jersey, his family said.

During his career, Newhouse served as president of the Star-Ledger in Newark, N.J., and head of Advance Publications’ newspaper group, which he navigated into the internet age.

“You reveled in his company. He filled you with energy and humor when you felt doubtful and weak,” said Anna Wintour, the global editorial director of Vogue and Conde Nast’s chief content officer.

“He was scrupulous about not interfering in editorial business, but if you turned to him for counsel, he invariably offered judicious advice,” she said in an obituary released Tuesday night by the Newhouse family.

Newhouse, who lived in New York, spent nearly 50 years overseeing the 35 newspapers of Advance Publications, the media business started by his late father, Samuel Irving Newhouse Sr., in 1922. His older brother, S.I. Newhouse Jr., was chairman of the company and oversaw Conde Nast magazines. He died in 2017.

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Louis D. Boccardi, retired president and chief executive of the AP, said Newhouse was an extraordinary chairman for the cooperative.

“His voice was never the loudest in the room, but it was often the wisest,” Boccardi said. Newhouse was instinctively private, but behind that, Boccardi said, was a generous man, at home anywhere and curious about everything.

“He could come across as self-effacing and deferential, but in Don’s skilled hands those were qualities that made him an enormously strong and effective leader,” Boccardi said. “You don’t often see the adjective ‘warm’ attached to a titan of industry, but it applied to him.”

A man who didn’t chase the spotlight

Newhouse, born in 1929, was known for staying out of the public eye. A reporter once asked him to list the biggest chances he took in his career. The answer: “Inviting your questions.”

The usually reserved Newhouse did step into the spotlight when he took on the role of chairman of the Newspaper Assn. of America from 1993 to 1994 and then chairman of the AP board of directors from 1997 to 2002. He had served on the AP board for nine years before becoming its chairman.

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“He was a smart and shrewd businessman but as thoughtful and kind a man as you’ll find. Being in his presence was always a joy,” said Doug Clifton, editor of one of Newhouse’s papers, the Plain Dealer in Cleveland, from 1999 to 2007.

Newhouse attended Syracuse University but never graduated, heading into the family’s newspaper business instead. He would regularly visit his newspapers but left the ultimate authority of running them to his publishers.

“Each of our newspapers operates independently, with publishers who are strong, who set policy for their individual organizations and who have the authority and responsibility of carrying out the policies they set,” he said in 1993 when taking over as chairman of the newspaper association.

Newhouse was known for spending money to make sure that papers got the best stories. Jim Willse, editor of the Star-Ledger in Newark, N.J., from 1995 until 2010, said he would give “us all the resources we needed to make the Ledger really special.” Willse said Newhouse loved newspapers and newspaper people.

“He especially enjoyed it when we’d have a story about some politician caught with his hand in the cookie jar, or a spicy feature about stuffed shirts behaving badly,” Willse said.

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Newhouse’s philosophy of spending money to produce quality coverage and a hands-off approach toward his editors led to many successes, including multiple Pulitzers.

Many of those newspapers were able to thrive and remain profitable because they dominated their market, but Newhouse said he was very much aware of what he called the “dramatically changing media landscape” and how people get their news.

“The 15th-century revolution was epitomized by the printing of the Gutenberg Bible; ours by Ted Turner’s cable news network and by web-based news sites — news in real time from anywhere to everywhere,” he said in 2004 at the rededication of a communications school named after his father at Syracuse University.

Three years later, he told one of his papers, the Post-Standard of Syracuse, N.Y., that newspapers can survive “by producing content that is relevant, interesting, accurate and entertaining for newspapers and the internet.”

He steered through financial struggles

Yet the papers did ultimately struggle financially.

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Advance was known in the industry for a pledge that employees who weren’t in a union would have jobs regardless of economic downturns or technological advances. In 2009, the company announced that the pledge would be withdrawn.

The company also moved away from daily publishing of several papers. In 2012, it announced that the Post-Standard; the Times-Picayune in New Orleans; the Patriot-News in Harrisburg, Penn.; and the Birmingham News, the Press-Register of Mobile and the Huntsville Times, all in Alabama, would cease daily publication and would only offer print editions on Wednesdays, Fridays and Sundays. Those changes were accompanied by hundreds of layoffs.

“His conservative approach left both the papers and its employees somewhat unprepared for the realities of the internet,” said Thomas Maier, who wrote a 1994 biography of the family.

Newhouse’s eldest son, Steven, spearheaded the company’s growth on the internet and on mobile devices. Steven Newhouse is currently co-president of Advance Publications.

“My dad spent his life in the newspaper business and was devoted to it, built it up and enjoyed many good years. When it became more challenging, he was first in line to work through, finding solutions to keep the local journalism franchise going,” he said.

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Newhouse is also survived by another son, Michael, daughter Katherine Mele and grandchildren. His wife, Susan, died in 2015.

Mayerowitz writes for the Associated Press.

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Child safety groups want FTC to investigate Roblox

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Child safety groups want FTC to investigate Roblox

Child safety advocates say the massively popular gaming platform Roblox could be bad for kids.

Fairplay and the National Center on Sexual Exploitation have requested the Federal Trade Commission to investigate if the games on Roblox are designed to make kids spend an unhealthy amount of time and money on their screens.

Roblox’s core users are young kids.

In a letter submitted to the FTC, the groups argue that Roblox’s engagement-maximizing design features, virtual currency system, and voice and text chat communication features are inappropriate for the platform’s user base and pose a substantial risk of harm.

“Alone and in combination, these three components capitalize on young users’ developmental vulnerabilities, exploit their desire for authentic self-expression, monetize their lack of impulse control, and turn in-game purchasing power into a form of social status,” the groups noted in the letter submitted Thursday to the FTC.

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Roblox allows the purchase of virtual assets — clothing and dance moves, for example — which can only be purchased with the platform’s in-game currency, Robux. The platform obscures the exchange rate between dollars and the in-game currency, leaving young players to navigate a complex system of fluctuating conversion rates that increases the amount of real-world money players spend, according to the letter.

For instance, players can receive more Robux per dollar by purchasing larger bundles of currency or buying a “Roblox Premium” subscription, making it harder for children to perform financial calculations on how much they are spending on the platform.

The letter pointed to instances of unexpected Roblox charges, as one parent discovered that his daughter spent more than $5,000 on Roblox without understanding that she was spending real money.

The letter also outlined examples of “scarcity marketing” techniques that increase demand through limited-quantity assets and time-based reward to drive sales of virtual items, driving a false sense of urgency. Some see it as a strong-arm sales technique that should not be used on children:

“Items only available for a limited time encourage both rapid purchases and returning to the platform frequently — sometimes multiple times per day — to avoid missing out on items,” the letter said.

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A Roblox spokesperson said that the company “strongly disputes these claims. Our platform is designed to provide a positive, healthy and enjoyable experience — we build for fun and connection, not short-term engagement. While no system can be perfect, we have a set of safeguards designed to support a safe and civil environment, and clear policies for game creators that require fair treatment of players.”

The groups pointed out that third-party games developed on Roblox are designed to profit from in-game purchases, and have “gambling-like” engagement mechanisms such as lootboxes, in which players cannot see what’s inside until after they have purchased it — and the items vary in value.

“We have clear policies prohibiting both actual and simulated gambling, and a set of rules governing how game creators can use gameplay mechanics like paid random items,” the Roblox spokesperson said. “Most games on Roblox are free to play and no one is required to purchase Robux. In the first quarter of 2026, only 1.4% of our 132 million daily active users were payers on the platform.”

The letter also alleged that the voice and text chat features on the platform expose children to sexual content, and argue that recent changes to age checks have not eliminated opportunities for adult-minor contact.

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