The nation’s central bankers didn’t grow up in the circus, but they’re walking a tightrope nonetheless. Amid pressure on all sides from the anticipated effects of President Trump’s tariffs, the Federal Reserve held interest rates at 4.25%–4.5% yesterday, as expected, and ramped up warnings about the nation’s economic trajectory.

“We can afford to be patient as things unfold,” Federal Reserve Chair Jerome Powell said when asked by an Axios reporter why the Fed was waiting to make a policy decision until hard data caught up with soft data—a gap known as the “Vibecession.”

Stagflation risks

Though he’s waiting to see what happens, Powell is concerned for the future: “If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” he said.

• Though tariffs typically bring about a one-time price increase, inflation from Trump’s policy rollout “could instead be more persistent,” Powell said.
• But for now, recent growth in employment and spending indicate “a healthy economy, albeit one that is shrouded in some very downbeat sentiment,” Powell said, referencing record-low consumer optimism as people in the US brace for tariff impacts that haven’t shown up yet.

The president probably isn’t happy

On Sunday, President Trump renewed his call for Powell to cut rates and called him “a total stiff,” but walked back his previous statements that he would fire Powell, something he may not legally be able to do, because the Fed chair’s term ends in a year.

Powell said yesterday that the president’s statements have no effect “at all” on the Fed’s decisions.

Wait-and-see mode: Amid “so much uncertainty,” Powell said, the Fed’s hands are pretty much tied while the Trump administration negotiates trade deals, which could provide businesses and families with more stability than they have now. No agreements have been announced yet, but President Trump said on Truth Social last night that he plans to hold a press conference today to address “a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY.” The New York Times reports that the country is the UK.—ML

Pakistan vows to respond after India launches airstrikes. Pakistan said 31 people were killed by the airstrikes, which India said targeted nine areas where terrorist attacks had been planned in retaliation for a terrorist shooting in Kashmir last month that killed 26 tourists. Pakistan called the strikes an act of war, and Prime Minister Shehbaz Sharif’s office said the country “reserves the right to respond, in self-defense, at a time, place, and manner of its choosing.” The confrontation has stoked fears of a potential escalation in conflict between the two nuclear-armed countries.

Apple is “actively looking at” bringing AI search to Safari. Apple’s SVP of Services, Eddy Cue, revealed the potential revamp while testifying yesterday in a DOJ competition lawsuit against Google that takes aim at the $20 billion a year the search engine pays to be the default in Apple’s browser, Bloomberg reported. Switching from a standard search engine to AI would be a major change for the iPhone-maker, but Cue reportedly said that Safari searches had gone down for the first time last month as people turned to AI instead. “Prior to AI, my feeling around this was, none of the others were valid choices,” Cue told the court. None of this was good news for Google, and the report sent the stock of its parent company, Alphabet, down.

China and the US to talk trade in Switzerland this weekend. In the first high-level trade discussions between the two countries since President Trump introduced 145% tariffs on Chinese goods and China retaliated with its own duties, Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will sit down with their Chinese counterparts. Going into the meeting, the two sides are far apart, and President Trump said yesterday he wouldn’t lower tariffs in advance. Bessent said, “The current tariffs and trade barriers are unsustainable, but we don’t want to decouple. What we want is fair trade.” China, which has cast the US as a bully in the fight, cautioned the US against using the talks as “a smoke screen to continue coercion and extortion.”—AR

The Middle East is getting a pilgrimage site for Disney adults. In addition to reporting strong earnings yesterday, the House of Mouse said it plans to open a theme park in the United Arab Emirates.

The company noted that a third of the world’s population lives within a 4-hour flight of Abu Dhabi’s resort-filled waterfront, where its seventh park—and its first in the Middle East—will be located.

Disney plans to provide the magic, but not much else, as local company Miral will handle the park’s development and its day-to-day operations:

• Disney won’t own the park, nor will it put any money into it. Instead, it will only provide creative ideation and operational oversight to Miral.
• Disney said it’ll start getting royalties for its IP as soon as the park opens.

There’s no set ribbon-cutting date, but Disney CEO Bob Iger said its parks usually take up to two years to develop and “approximately five years to build.”

Riding the parks bonanza

In-person experiences have proven to be Disney’s golden goose. Operating profits at its US Parks grew 13% last quarter compared to the prior year.

Globally, it plans to invest $60 billion into its parks and themed cruises by 2033.

But it’s not just parks making Disney shareholders scream like they’re on a rollercoaster: Disney+ and Hulu earned $336 million in profit last quarter, compared to $47 million a year earlier.—SK

Streaming companies are forever trying to recreate the magic of turning on a hotel TV in the middle of Bring It On when you need a break during a family vacation. Yesterday, Netflix announced it’s rolling out a new TV homepage—its biggest redesign since it started making original content over a decade ago.

After getting every other streaming service to copy its endless scroll of static tiles, Netflix wants to be more precise. The new homepage for TV screens, launching next week, highlights a smaller number of viewing options, similar to how YouTube previews content: by playing a few seconds of the program.

• The recommendation algorithm will speed up to offer shows based on your immediate searches rather than lagging behind by a day as it does currently, so the app will feel tailored to your interests as you scroll like TikTok does.
• Netflix Chief Product Officer Eunice Kim said about half of its 300 million subscribers log into the app with no idea what they want to watch, and the redesign is meant to help them make a good choice faster.

Mobile is changing, too: On phones, the Netflix app will soon have a vertical TikTok-like feed to preview Netflix’s catalog. It will also offer some users a beta version of its OpenAI-powered chatbot, so you can ask it for a movie that is kinda like what it feels like to watch Practical Magic on the first autumn day, but gorier.—MM

Like a “couture” dress purchased for cheap online, the podcast industry may be twice as big as anyone expected. Podcasts generated $7.3 billion in global sales last year, according to a new estimate from research firm Owl & Co. that took into account a broader swath of revenue than the number generally relied on by industry insiders, Bloomberg reports. That number, compiled by the Interactive Advertising Bureau, put ad sales at $2.4 billion in 2024, but that only covers the US and only includes audio advertising. Owl & Co.’s estimate is global, meaning it accounts for China’s massive podcast culture, and also covers video revenue, including YouTube—where more than 1 billion people are believed to watch podcast content every month.

And however much money the industry is making, podcasts are also gaining cultural cachet. Fresh off a US presidential election where the candidates visited many popular podcasts, the genre that serves as the soundtrack for many a commute or gym visit is now getting its own category at the Golden Globes. The eligibility requirements for the new category, which will debut at the 2026 awards, haven’t been released yet, but we’re hoping it leads to Neal and Toby in tuxes.—AR