President Donald Trump’s so-called “Liberation Day” tariffs are scheduled to take effect Aug. 1, following the expiration of a 90-day pause. “No extensions. No more grace periods. August 1, the tariffs are set,” Commerce Secretary Howard Lutnick declared on Fox News Sunday on July 27.

Since their initial announcement on April 2, the White House has engaged in trade negotiations with dozens of countries to secure more favorable tariff rates and revised trade terms.

To date, the U.S. has reached tariff agreements with the U.K., European Union and Japan, all of which secured lower rates than initially proposed. The U.K. negotiated a 10 percent tariff on its exports to the U.S., while the E.U. and Japan settled at 15 percent. These are still significantly higher than pre-Trump trade levels, but below the rates announced in April. Japan also committed to a $550 billion investment in strategic American sectors, including semiconductor manufacturing.

Other major U.S. trade partners, including China, remain without deals. Canada, Mexico and South Korea are bracing for tariffs of 35 percent, 30 percent and 25 percent, respectively, starting Friday.

Earlier this month, Trump said he would send letters to more than 150 countries notifying them of their final tariff rates. According to the Yale Budget Lab, the average effective tariff rate on all U.S. imports will exceed 20 percent on Aug. 1, the highest level in more than 100 years.

Tariff announcement triggers “TACO” trade

Markets recoiled immediately after the April 2 announcement, with the S&P 500 and Nasdaq suffering their worst single-day losses since the pandemic. JPMorgan warned that if the tariffs were implemented as planned, the U.S. could tip into recession.

Trump initially delayed implementation with a 90-day pause, pushing the effective date to July 9. A further extension moved the start date to Aug. 1, as trade talks continued. The only element that took effect immediately was a baseline 10 percent tariff on all imports, albeit with some carveouts.

Wall Street took note. Financial Times columnist Robert Armstrong coined the term “TACO trade”—short for “Trump Always Chickens Out”—to describe the market’s growing expectation that Trump’s bold declarations would be walked back. But if Trump follows through on Aug. 1, investors may finally believe he’s not bluffing, potentially sparking another sell-off.

In announcing the tariffs on April 2, President Trump invoked the idea of “reciprocal tariffs,” claiming countries like China imposed disproportionately high duties on U.S. goods. But the White House’s calculations—based on trade deficits rather than actual tax rates—were widely dismissed by economists as misleading. Persistent trade imbalances, they argue, are driven more by global capital flows and currency dynamics than by foreign tariffs.

Where is the U.S. economy headed?

Despite the administration’s insistence that tariffs won’t be inflationary, signs are already emerging.  June’s consumer price index (CPI) rose to 2.7 percent year-over-year, up from 2.4 percent in May—even as imports and consumer spending declined and the Fed held rates steady at 4.5 percent.

Federal Reserve Chairman Jerome Powell has signaled a cautious approach, saying the central bank will “wait and see” how tariffs affect the broader economy before adjusting rates. While the 10 percent baseline tariff hasn’t yet triggered sharp inflation, many companies stockpiled inventory after Trump’s election, locking in lower prices that cushioned short-term effects. But that buffer is fading. Walmart and other major retailers have already warned that price hikes are coming.

Stephen Stanley, chief U.S. economist at Santander, projects CPI to hit 3 percent by year-end. JPMorgan now puts the odds of a global recession in 2025 at 40 percent. That raises the specter of stagflation, the dreadful combination of high inflation and low growth. Stagflation would corner the Fed into a no-win policy trap. Raising rates could control inflation but worsen the downturn. Cutting them might stimulate growth but pour fuel on rising prices. The Fed’s dual mandate—price stability and low unemployment—does not explicitly include growth, and history shows it has prioritized inflation control in previous stagflationary episodes.

Apple is teaming up with MP Materials, the only rare earth miner in the U.S., to build a $500 million plant in Texas that will recycle and manufacture rare earth magnets—key components used in everything from iPhones to fighter jets. The move comes as the U.S. looks to bring more of its tech supply chain back home and reduce its reliance on China, which currently dominates global rare earth processing. These minerals have been making headlines lately, not just for their role in cutting-edge tech, but also as flashpoints in rising trade tensions between Washington and Beijing.

The new facility will feature neodymium magnet production lines tailored to Apple’s specific hardware needs. It’s part of Apple’s broader plan to invest $500 billion in U.S. manufacturing over four years. MP Materials expects to begin shipping magnets to Apple as early as 2027.

“Rare earth materials are essential for making advanced technology, and this partnership will help strengthen the supply of these vital materials here in the United States,” said Apple CEO Tim Cook in a press release.

Rare earth magnets are critical for a wide range of products, from iPhones and electric vehicles to fighter jets and missile guidance systems. Yet the U.S. has historically depended on China for nearly all rare earth processing. While these minerals are not rare geologically, they are expensive and complex to process, and China currently controls about 92 percent of global output.

Apple’s announcement follows a major move by the U.S. Department of Defense, which last week made a $400 million investment in MP Materials as part of a landmark public-private partnership. The Pentagon purchased a new class of convertible preferred shares along with a 10-year warrant at $30.03 per share. If fully exercised, the government could hold a roughly 15 percent stake in the company—more than major shareholders like BlackRock or co-founder James Litinsky.

Funds from the Defense Department will go toward building another magnet plant, which will produce a new class of “10X” magnets. The Pentagon has committed to purchasing 100 percent of that output over the next decade. That facility is expected to open in 2028 and will boost MP Materials’ annual magnet capacity to 10,000 metric tons—enough to meet a significant share of U.S. demand.

Apple, meanwhile, has already begun reducing its dependence on newly mined rare earths by prioritizing recycled materials. By 2023, the company reported that about two-thirds of the aluminum, three-fourths of the rare earth elements and 95 percent of the tungsten used in its products came from recycled sources. That same year, Apple also pledged to use only recycled cobalt in its batteries going forward.

The moves by Apple and the Pentagon are part of a broader U.S. push to nearshore rare earth supply chains. Earlier this year, President Trump proposed annexing Greenland, an autonomous Danish territory estimated to contain $4.4 trillion worth of rare earth reserves. Vice President JD Vance made a surprise visit in support of the plan.

Meanwhile, rising trade tensions between Washington and Beijing have underscored the strategic importance of rare earth independence. In April, China imposed export restrictions on rare earth minerals bound for the U.S. The controls were lifted on May 11 as part of a 90-day trade truce, but the episode highlighted the risks of continued reliance on China for such critical materials.

The Trump administration’s tariffs are proving to be a “self-inflicted wound” for the U.S. economy, according to former Treasury Secretary Larry Summers. Speaking in a June 24 fireside chat with Harvard Business Review editor-in-chief Adi Ignatius, the economist and former president of Harvard University argued that the trade policies have triggered a rare and troubling response from the Federal Reserve: simultaneously raising its forecasts for both inflation and unemployment.

“It simultaneously raises prices, increases unemployment, and reduces competitiveness,” Summers said.

When Donald Trump took office in 2016, the average tariff on U.S. imports stood at about 1.5 percent. With the White House’s negotiations underway with major trading partners, Summers estimates tariffs will settle at “13 to 14 percent on average across the board,” which would still be the highest in nearly a century.

These tariff hikes are contributing to a broader slowdown in the global economy. As a result, Most major banks and international institutions have lowered their global growth forecasts for 2025. The World Bank now projects global GDP growth at just 2.3 percent, about half a percentage point lower than expected earlier this year, marking the weakest pace of growth outside of recessions in the past two decades.

Summers also highlighted mounting fiscal concerns in Washington. He criticized Congress’s recent passage of the One Big Beautiful Bill Act, a budget reconciliation package that slashes taxes without equivalent spending cuts. The Congressional Budget Office estimates the legislation will increase the federal deficit by $2.4 trillion over the next decade.

“Running up large deficits and relying on the ability to roll over debt is like wandering across the street in heavy traffic,” Summers said. “The cars may stop, and it may all be okay. But you’re taking a risk that is probably more prudent not to take.”

Rising deficits also raise the government’s interest burden and the risk of default. Moody’s downgraded the U.S. credit outlook last month, citing growing concerns about the national debt.

Summers said that while the U.S. economy faces headwinds, the risk of recession in 2025 is “real” but still “less than 50-50.”

Echoing that sentiment, JPMorgan analysts have pegged the odds of a recession this year at around 40 percent. The bank has cut its U.S. growth forecast to 1.3 percent, down from 2 percent earlier in the year. JPMorgan also warned of an elevated risk of stagflation, a scenario in which slow economic growth and high inflation trap the Fed in a policy dilemma, where raising interest rates curbs inflation but deepens stagnation, while lowering rates boosts growth but worsens price pressures.

The Federal Reserve voted to keep interest rates unchanged at Wednesday’s (June 18) FOMC meeting. Fed chair Jerome Powell said he expects “meaningful” inflation soon, noting that some of the cost burden from the Trump administration’s tariffs “will fall on the end consumer.”

Four months after President Trump began imposing tariffs on major U.S. trade partners, consumer prices have remained relatively stable. May inflation came at 2.4 percent, slightly below the 2.5 percent predicted by economists. One key factor holding inflation down is a continued decline in shelter costs, which make up the largest portion of the Consumer Price Index (CPI).

Since Feb. 1, President Trump has enacted a sweeping series of tariffs via executive orders, most notably the “Liberation Day” tariffs announced on April 2 targeting about 90 countries. While Trump has paused the majority of those tariffs for 90 days, existing levies are still at record high levels. So, the question has to be asked: why hasn’t inflation surged?

Economists widely agree that the full inflationary impact of tariffs may take months to materialize. Many businesses rushed to build up inventory ahead of the tariff rollout, allowing them to temporarily shield themselves—and consumers—from higher costs. Stephen Stanley, chief U.S. economist at Santander, expects CPI to rise to 3 percent by the end of this year, with noticeable increases starting in June and July.

Another strategy retailers have employed is the use of bonded warehouses—special free-trade zones where companies can store imported goods without paying tariffs until the items are withdrawn. These warehouses have become a critical buffer amid volatile trade policy. According to data from WarehouseQuote, the cost of bonded warehouse space has surged, now running four times higher than regular storage rates after having merely doubled in early 2024. Inventory can be held in these facilities for up to five years.

“The largest inventory buildup happened in March, right before the ‘Liberation Day’ tariffs,” KPMG economist Diane Swonk told Observer. “After Trump’s election, companies began stockpiling inventory out of fear of impending tariffs.”

That inventory cushion has helped U.S. businesses buffer consumers from price shocks—at least for now. Ongoing trade negotiations between the White House and key trade partners are expected to conclude before July 8, when the 90-day pause expires.

Geopolitical tension in the Middle East fuels inflation concerns

But tariffs aren’t the only inflationary threat. Rising concerns over geopolitical tensions in the Middle East are also fueling consumer price pressures. The escalating conflict between Israel and Iran—particularly fears over the potential closure of the Strait of Hormuz, a critical shipping lane through which 20 percent of the world’s oil supply flows—has added to inflation anxiety. Following Israel’s June 13 attack on Tehran, the price of crude oil surged 13 percent to $77.18 per barrel, though it has since eased to around $74.

KPMG’s Swonk projects that a temporary oil price spike to $85 per barrel, followed by a pullback to $74, could lift global inflation to 4.1 percent in 2025. That’s up from her previous forecast of 3.7 percent, which had already accounted for expected tariff impacts. “Consumers are going to feel the impact soon,” she said.

Meanwhile, speculation is growing that Treasury Secretary Scott Bessent—an influential macro investor and key architect of the administration’s economic strategy—could be tapped to succeed Powell when his term ends next year.

Akio Toyoda, grandson of Toyota Motors’ founder Kiichiro Toyoda, is leading a $33 billion effort to take private Toyota Industries—one of the automaker’s largest and oldest suppliers. The deal carries deep symbolic weight: Toyota Industries was the original parent company of Toyota Motors. Founded by Kiichiro Toyoda in 1926, Toyota Industries spun off Toyota Motors as a separate entity in 1937. Now, nearly a century later, Akio Toyoda is reclaiming the ancestral core of the Toyota empire—at a significant discount—tightening the founding family’s grip on the world’s largest automaker.

Both Toyota Motors and Toyota Industries are subsidiaries within the Toyota Group conglomerate. Today, Toyota Industries is the world’s largest manufacturer of forklifts.

Lucy Guo, the 30-year-old co-founder of high-flying A.I. startup Scale AI, just dethroned Taylor Swift as the youngest self-made female billionaire. With a net worth nearing $1.3 billion, Guo landed at No. 26 on Forbes’ annual “America’s Richest Self-Made Women” list, published yesterday (June 3).

Raised in Fremont, Calif. by Chinese immigrant parents, Guo was “always an entrepreneur growing up,” she said in a 2023 interview—selling Pokémon cards and colored pencils in kindergarten. By second grade, she was coding; soon after, she was building bots that made her thousands. In 2014, at just 20 years old, she dropped out of Carnegie Mellon University, where she studied computer science, after receiving the Thiel Fellowship. The program, backed by billionaire investor Peter Thiel, offers $200,000 over two years to help promising college students build companies—on the condition they leave school behind.

Around that time, she interned at Facebook, had a brief stint at Quora in 2015, and then became Snapchat’s first female product designer, working full-time for a year. At Quora, she met Alexandr Wang, a math prodigy two years younger who rose quickly at the company. In 2016, the two founded Scale AI—initially as a healthcare platform matching patients with doctors for specific procedures. The concept earned them admission to Y Combinator’s summer 2016 batch.

A friend at Y Combinator floated the idea of building an “API for Humans”—a streamlined way for people to exchange data at scale. The concept stuck. It quickly attracted funding from Accel and morphed into Scale AI’s core business: supplying the high-quality, labeled data that powers A.I. systems. By employing thousands of contractors to annotate images and data points, Scale AI helps companies like Tesla train their models to recognize everything from pedestrians to roadblocks.

Guo was ousted from Scale in 2018, reportedly after a disagreement with Wang, who still serves as CEO. She kept a roughly 5 percent stake—an asset that’s aged well. Scale AI is currently valued at $25 billion after closing a fundraising round earlier this week.

“I don’t really think about it much, it’s a bit wild. Too bad it’s all on paper haha,” Guo told Forbes via text in response to her new billionaire status.

Her co-founder, who owns 15 percent of Scale AI, has been the world’s youngest self-made billionaire since 2022, currently boasting a net worth of $3.6 billion.  

While Guo insists most of her fortune exists only on paper, she hasn’t exactly been living modestly. Last year, she bought a $4.2 million designer home in Los Angeles and also owns a $6.7 million apartment in Miami. At the latter, she hosted a party featuring exotic animals that reportedly irritated fellow residents, including David Beckham. In 2022, the New York Post anointed her “Miami’s number one party girl.”

Since parting ways with Scale AI, Guo has stayed busy. She founded Backend Capital to invest in early-stage startups, backing hits like Ramp, the financial software firm now worth $13 billion. Not long after, she raised $50 million between 2022 and 2024 for her next act: Passes, a pay-for-content platform she founded and now runs as CEO. The platform attracted major names like Shaquille O’Neal and DJ Kygo, offering fans exclusive access to celebrity content. But controversy soon followed: Passes was accused of enabling underage sexual content. Prior to the allegations, the company had already banned underage creators and scrubbed all associated content.

Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest maker of electric vehicle batteries, no longer wants to be just a Chinese powerhouse. With its $4.6 billion Hong Kong IPO this week—the largest globally so far this year—CATL is making its next move clear: Europe. According to its IPO filing, roughly 90 percent of the proceeds will fund a massive new battery plant in Hungary aimed at supplying major European automakers, including BMW, Volkswagen and Stellantis.

The driving force behind CATL’s rise is Robin Yuqun Zeng, the company’s founder and chairperson. The Hong Kong listing cements Zeng’s status as one of the world’s richest people, with a net worth of $39 billion, placing him 42nd globally and fourth in China, according to Bloomberg’s Billionaires Index.

Zeng was born in 1968 in the rural village of Ningde, Fujian province, into abject poverty. A strong student with big ambitions, he was accepted to Shanghai Jiaotong University, one of China’s top institutions, where he majored in shipbuilding. After graduation, he took a job at a state-owned enterprise in Fujian but quit just three months in, moving to Dongguan—one of the few cities at the time where free-market reforms allowed greater career mobility. He joined SAE Magnetics and rose quickly through the ranks. In 1999, he left to co-found Amperex Technology Limited (ATL), which produced lithium batteries for consumer electronics, including the iPhone. While ATL thrived through its partnership with Apple, Zeng pursued a Ph.D. in condensed matter physics at the Chinese Academy of Sciences.

After ATL was acquired by Japan’s TDK in 2005, Zeng remained with the company and in 2012 spun off its electric vehicle battery division into a new firm: CATL. Headquartered in his hometown of Ningde, CATL earned $1.91 billion in revenue in the first quarter of 2025 alone, marking a 33 percent year-over-year increase. Its Chinese name, “宁德时代” (Ningde’s Era), reflects Zeng’s deep ties to his birthplace and his mission to bring prosperity to the region.

Zeng has often been described as a gambler, having taken three major risks in his life: quitting his first job, founding ATL and later launching CATL. A widely shared image shows him standing next to a plaque in his office that reads, roughly, “keep your gambling spirit strong.”

Building CATL wasn’t easy. The company faced fierce competition, especially in securing raw materials and producing high-quality, low-cost batteries for clients like Tesla. In 2020, CATL held just the third-largest global market share; by 2024, it had become the undisputed leader with 36.7 percent. In a 2021 interview, Zeng revealed his vision to replace all fossil fuel-powered products with clean electric alternatives—framing CATL’s mission as just beginning

The company’s expansion into Europe comes at a critical moment. Chinese EV makers like BYD are also targeting the region, U.S.-China tensions are escalating, and the Trump administration has imposed 25 percent tariffs on Chinese auto imports.

Earlier this year, the U.S. placed CATL on a defense-related watchlist over alleged ties to the Chinese military—claims the company has denied. Both the U.S. and E.U. are tightening tariffs on Chinese EVs and components, raising concerns about how far CATL can extend its global reach.

Still, investor confidence appears strong. Shares jumped more than 16 percent on CATL’s Hong Kong debut on May 20, closing at HK$306.20, well above the HK$263 IPO price. The company is already listed on the Shenzhen Stock Exchange, where its stock reversed early losses following the Hong Kong surge—buoyed by global investor enthusiasm.

Warren Buffett returned a jaw-dropping 5,502,284 percent to shareholders over his 55-year reign atop Berkshire Hathaway—a figure that makes the S&P 500’s 39,054 percent return in the same period look like a rounding error. With a net worth of $160 billion, the 94-year-old legend has earned his spot in the pantheon of investment greats through a disciplined, deceptively simple philosophy: buy great businesses, hold forever and let compounding do the heavy lifting. But even the “Oracle of Omaha” isn’t immune to missteps. In fact, Buffett has often been the first to call out his flops.

From buying into Coca-Cola at the right moment to sitting out on tech stocks for decades—only to reverse course with Apple, which he later called Berkshire’s “third business”—Buffett’s investment record reflects a mix of long-term successes and occasional missteps. He has also been candid about instances when he waited too long or paid too much for too little.

What follows is a look at some of Buffett’s most triumphant bets and his most teachable blunders in no particular order.

Winners

Coca-Cola: In 1988, Warren Buffett invested $1.3 billion in Coca-Cola, acquiring a significant stake in the beverage giant. Today, Berkshire Hathaway owns 9.3 percent of the company, a position valued at approximately $28 billion.

Apple: Buffett first bought shares of Apple in 2016, and the investment has since become Berkshire Hathaway’s most valuable holding. His initial $35 billion stake had grown to $173 billion by 2023. (After selling about two-thirds of its stake in the company last year, Berkshire’s remaining ownership was worth $63.9 billion by the end of this year’s first quarter.) At this year’s Berkshire Hathaway shareholders meeting last week, Buffett said, “I’m somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I’ve ever made.”

GEICO: Buffett began purchasing shares of GEICO in 1976 and completed a full acquisition of the auto insurer in 1996. He has called GEICO his “favorite child,” and his interest in the company dates back to his days as a graduate student at Columbia University. Since 1974, GEICO has climbed from the fifth to the second-largest auto insurer in the U.S. 

American Express: Buffett made a pivotal investment in American Express during a public relations crisis in the 1960s, a move that has delivered significant long-term returns. Although Berkshire Hathaway has not added to its position since 1995, it now owns more than 21 percent of the company, a stake valued at over $44 billion. Since going public in 1977 at $3.17 per share, American Express stock has increased nearly 100-fold, outperforming the S&P 500 over the same period.

See’s Candies: Buffett acquired See’s Candies in 1972 for $25 million, when the company was generating just $4 million in pre-tax earnings. The investment has since returned more than $1.6 billion. With roughly 70 percent of its stores located in California, See’s remains a modest regional business, but Buffett’s late business partner, Charlie Munger, credits it as an example of buying great businesses at fair prices. Until then, Buffett and Munger had focused on buying distressed assets.

BYD: In 2008, following a recommendation from Munger, Buffett invested $232 million to acquire a 10 percent stake in Chinese automaker BYD. Although Buffett initially sought to buy a larger portion of the company, BYD founder Wang Chuanfu declined to sell more. The investment proved to be a standout success: by 2021, Berkshire’s stake had grown to $7.7 billion.

National Indemnity Company: National Indemnity Company, based in Omaha, was Buffett’s first major insurance acquisition, finalized in 1967. The deal marked a turning point for Berkshire Hathaway, providing a consistent source of investment capital through the insurer’s float—the cash held between collecting premiums and paying out claims. That float has since become a defining feature of Berkshire’s investment model, reaching $173 billion by the end of the first quarter of 2025.

Blue Chip Stamps: In the late 1960s, Buffett acquired controlling shares in Blue Chip Stamps, a business flagged by value investor Rick Guerin as significantly undervalued. The company sold stamps that customers could redeem at retail stores, though many went unused, leaving Blue Chip with large reserves of unclaimed cash. The acquisition gave Berkshire access to roughly $100 million in capital, which Buffett then used to fund early investments in companies like See’s Candies and Coca-Cola.

Blunders

Dexter Shoe: Calling it his “most gruesome mistake,” Buffett paid $433 million for Dexter Shoe in 1993, which quickly collapsed shortly after.

Berkshire Hathaway (Yes, Really): Buffett has also called his original investment in Berkshire Hathaway a mistake. The company was a struggling textile manufacturer when he took control, and he has since admitted that the purchase was driven by emotion rather than sound analysis. While Berkshire ultimately became his investment vehicle, he believes the early capital could have been deployed more effectively elsewhere.

Tesco: Buffett’s investment in British grocery chain Tesco ended in a $444 million loss. Although early signs of trouble emerged, he was slow to act, later acknowledging that he waited too long to sell.

Amazon: While Berkshire never lost money on Amazon, Buffett has repeatedly expressed regret over not investing in the company earlier. He said he “admired it long ago” but did not understand the business model enough to make an investment.

ConocoPhillips: In 2009, Berkshire reported its largest quarterly loss in more than two decades, largely due to a write-down on its stake in ConocoPhillips. Buffett admitted that buying into the oil company when prices were near their peak was a miscalculation. He later scaled back the investment significantly.

US Air: Buffett invested $358 million in US Air’s preferred stock in the late 1980s, a decision he later labeled an “unforced error.” He acknowledged underestimating the structural challenges of the airline industry and overestimating the company’s ability to overcome them. The investment was ultimately written down by $269 million, reducing its value to a fraction of the original amount.

Greg Abel will take over as CEO and President of Berkshire Hathaway on Jan. 1, 2026, the company’s board confirmed following this weekend’s closely watched shareholder meeting in Omaha, Neb. Warren Buffett, 94, announced his retirement to a stunned crowd of 40,000 investors, capping a 55-year tenure during which he delivered a staggering 5,000,000 percent return. Abel, 62, long considered Buffett’s heir apparent, received the board’s formal endorsement after Buffett publicly declared it was “time” for the leadership transition.

Buffett will remain as chairman and said he has no plans to sell any part of his $160 billion stake in Berkshire Hathaway, making clear that his confidence in Abel is more than symbolic. “The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg’s management than mine,” Buffett told shareholders on Saturday (May 3).

Abel’s rise to Warren Buffett’s heir apparent

Greg Abel, a Canadian executive born in Edmonton, began his career in the energy sector after studying at the University of Alberta and playing hockey during his youth. His ascent started in 1992 at CalEnergy, a company that would go on to acquire MidAmerican Energy. Abel became CEO of MidAmerican in 2000—the same year Berkshire Hathaway purchased a controlling stake. The company was renamed Berkshire Hathaway Energy in 2014, and Abel now serves as its chair.

In 2018, Abel was appointed to Berkshire Hathaway’s board and named vice chairman overseeing all non-insurance operations. Long viewed as Buffett’s quiet heir apparent, Abel earned the legendary investor’s trust through his stewardship of major subsidiaries including Fruit of the Loom, See’s Candies and Precision Castparts. Buffett has praised Abel’s relentless work ethic and hands-on management style, noting that his chosen successor “works harder than I do.”

Abel’s challenges ahead

Abel’s first major test as CEO will be stewarding Berkshire Hathaway’s staggering $400 billion cash pile—an unprecedented war chest that demands shrewd allocation amid a volatile, high-rate market. While Abel has signaled he’ll follow Buffett’s general playbook, investors are watching closely to see where he diverges. “He would make a huge mistake trying to be Warren Buffett,” Fidelity’s Will Danoff told The Wall Street Journal. “Shareholders want Greg to be the best Greg Abel he can be.”

To say Abel has big shoes to fill is an understatement. Buffett isn’t just the CEO of a former textile firm turned $1.1 trillion conglomerate—he’s a once-in-a-century investor whose decisions have shaped how entire generations think about capital, value and patience. His influence is so vast that Investopedia maintains a short list of favorite Buffett books—none of which he actually wrote. His face is an evergreen fixture in the business section of every Barnes & Noble. Charlie Munger, Buffett’s right-hand man who died at 99 in 2023, holds a similarly revered place in the investing pantheon.

In this context, Abel isn’t just taking over a company—he’s inheriting a legacy. While Buffett never penned a book, he made shareholder letters a master class in business philosophy, and Abel has indicated he plans to carry that torch, continuing the tradition of clear-eyed, long-form missives that blend operational insight with timeless investing wisdom.

The next Pope will inherit not only Pope Francis’s bold and controversial legacy of institutional reform, but also the formidable challenge of fixing the Vatican’s fragile finances. Before his death, Francis was entrenched in an uphill battle to close the Vatican’s chronic budget deficit, reform the scandal-ridden Vatican Bank and address a pension system that remains severely underfunded.

Behind the scenes, Francis operated more like a hard-nosed CEO than a spiritual leader—unyielding on spending and laser-focused on fiscal discipline. Since 2021, he slashed salaries for the Vatican’s roughly 250 cardinals three times, reduced housing subsidies for senior staff, and frozen new hiring across the city-state—all in service of balancing the books.

Recognizing that traditional Vatican officials lacked the financial expertise needed for the job, Francis assembled an outside team of professionals to modernize Church finances. The team included Jean-Baptiste de Franssu, a former CEO of Invesco Europe; Jochen Messemer, CEO of ERGO Insurance Group; Joseph F. X. Zahra, chairman of Malta’s largest bank; and George Yeo, the former prime minister of Singapore.

The team dismantled archaic financial systems and enlisted global accounting firms to help bring Vatican finances up to international standards. In 2014, Francis consolidated the city-nation’s financial roles into a single body called the Secretariat of the Economy, effectively a CFO. The body is currently led by Benjamín Estévez de Cominges, an MIT graduate.

The Vatican oversees several distinct financial entities. One is the city-state itself, which functions like a small municipal government and is primarily funded by tourism, museum tickets and souvenir sales, since it lacks a tax base. The other is the Roman Curia, the Catholic Church’s global bureaucracy, which oversees embassies, investigative functions, pension management and nine administrative departments resembling government ministries.

It’s the Curia that has remained mired in red ink. For years, it has operated with annual deficits exceeding $50 million, against expenditures nearing $1 billion. Its pension system had an unfunded liability of approximately $1.7 billion as of 2015, and recent figures remain unavailable.

In 2015, the Secretariat for the Economy warned of “an alarming trend in Holy See finances.” More recently, in November 2023, Francis acknowledged the pension fund’s “serious prospective imbalance” and appointed Cardinal Kevin Farrell to oversee it—informally dubbed the Vatican’s “pension czar.”

The Vatican Bank—formally known as the Institute for the Works of Religion—has also undergone sweeping reforms under Francis. With estimated assets between $6 billion and $8 billion, it’s small by global standards but uniquely influential. In 2012, shortly before Francis’s papacy began, the Council of Europe’s Moneyval committee issued a scathing 241-page report detailing the bank’s shortcomings, including ties to money laundering and historical controversies involving Nazi-linked assets.

Francis responded by shuttering hundreds of suspicious accounts, moving asset management responsibilities to a newly created entity called Vatican Asset Management, and implementing stringent transparency regulations. He appointed de Franssu as president of the Vatican Bank to spearhead the reforms. Resistance from within the Vatican’s entrenched bureaucracy was intense—some officials even attempted to cancel a PwC audit initiated by Francis.

Yet despite these efforts, the financial system remains precarious. Budget and pension deficits linger, and trust in Vatican banking remains fragile. Whoever succeeds Francis will inherit a leaner, more accountable financial apparatus—but one still riddled with liabilities. The next Pope, in short, will need to be as unyielding a fiscal steward as his predecessor—if not more so.

What’s it like to run the world’s most influential central bank? In a rare moment of candor at the Economic Club of Chicago yesterday (April 16), Federal Reserve Chair Jerome Powell gave a glimpse into his daily routine—and addressed the political pressures threatening the Fed’s independence.

Powell has served as the 16th chair of the Fed since 2018, steering the institution through a whirlwind of economic crises, from the Covid-19 pandemic to the highest inflation in four decades and tariffs not seen in over a century.

President Donald Trump once described the Fed chair as the “greatest job in government,” saying, “You show up to the office once a month and you say, ‘Let’s see, flip a coin.’ And everybody talks about you like you’re a god.”

At yesterday’s fireside chat, the interviewer Raghuram Rajan, the former head of India’s central bank, asked Powell if the President’s perspective reflects reality. “I would agree, I think it’s the best job in government,” Powell responded, triggering audience laughter.

“And I really do enjoy it,” he went on to elaborate. “I do what everyone expects me to do. We do a little more reading as part of our daily regimen than the typical executive would do.”

“In terms of feeling like a god, we are blessed with a large number of aptly compensated critics who kind of tend to undercut that. So we don’t feel like a god,” Powell joked.

Powell reaffirms the Federal Reserve’s independence

The Federal Reserve is an independent government agency that reports to Congress. But President Trump has repeatedly challenged the central bank’s autonomy and threatened to fire Chair Jerome Powell, who has criticized the President’s tariff policy, warning it would increase inflation and hinder economic growth. Just today, Trump posted on Truth Social, “Termination could not come fast enough.”

It remains unclear whether the President has the legal authority to remove Powell. Under current law, the executive branch must provide a non-political justification to prove that the Fed chair is no longer capable of fulfilling the role.

The Supreme Court is currently deliberating Humphrey’s Executor v. United States, a case that could potentially grant the President broader authority to dismiss the heads of independent federal agencies for political reasons.

Commenting on the case, Powell said, “I don’t think that decision will apply to the Fed, but I don’t know, it’s a situation we are monitoring carefully.”

He reassured the audience of the central bank’s independence, saying “Our independence is a matter of law. Congress could change that law, and I don’t think there is any danger of that…We will never be influenced by any political pressure.”

The Fed chair also shared a glimpse of his life outside of drafting monetary policies. When asked what he enjoys beyond work, Powell said, “I play one of my guitars. I do Zoom calls with my kids and my grandkids. And I go to the gym a lot, just to stay healthy.”

The central bank is meeting on May 7 to determine its next step on interest rates. Currently, markets expect rates to stay the same after the May meeting but a 60 percent chance of a 25 basis-point cut in June, according to the CME Group’s FedWatch. Such expectations reflect “how they have been trained repeatedly by the Fed to expect looser financial conditions the minute there are any signs of unusual market volatility,” the economist Mohamed El-Erian wrote in a Bloomberg op-ed last week.

El-Erian, the former CEO of the investment management firm PIMCO, argued that the Fed should not cut rates too soon because “lessons from central banking history suggest that when faced with both parts of the dual mandate going against it, the Fed should give priority to putting the inflation genie back in the bottle.”

Curbing inflation is especially critical given that the Fed enters the current economic turbulence with “credibility eroded by the misguided 2021 transition inflation judgment,” El-Erian wrote. After the U.S. emerged from Covid lockdowns and consumer prices surged, Powell described the inflation spike as “transitory,” expecting it to ease quickly. Instead, price increases persisted and remained stubbornly above the Fed’s 2 percent target, even after aggressive interest rate hikes.

With that credibility weakened, El-Erian argued, it’s all the more important for the Fed to demonstrate that it takes its inflation mandate seriously. To its credit, the central bank has so far avoided a knee-jerk reaction to recent stock market volatility and a growing inflow of recession expectations from Wall Street’s top economists.

Fears of stagflation, the dreadful combination of high inflation and low growth, have gripped Wall Street since before “Liberation Day,” and now it seem to be the nation’s new best-case scenario. Jason Furman, a Harvard economist who served as chair of the Council of Economic Advisors (CEA) under former President Barack Obama from 2013 to 2017, said the U.S. is moving in that direction.

“Over the last four months, economists have upgraded their forecasts for inflation and downgraded their forecasts for growth,” he told Observer. “There is no technical definition of ‘stagflation,’ but this definitely moves the economy in that direction.”

Earlier this week, Intel’s new CEO Lip-Bu Tan delivered a keynote speech at the Intel Vision conference—just 14 days into his tenure. He takes the reins at a critical moment for the once-dominant American chipmaker, now struggling to keep pace with rivals amid the A.I. boom.

Intel still holds a commanding share of the CPU market for personal computers, but it lags behind companies like Nvidia and AMD when it comes to GPUs, the chip used for training A.I. models. Its stock has also seen a steep decline in recent years. Tan opened his keynote by acknowledging the urgency of the situation. “We have a lot of hard work ahead. There are areas we have fallen short of [customers’] expectations,” he told the audience. “I will put together strong teams to correct past mistakes.” He added that he would prioritize hiring “the best talent in the industry to come back and join or rejoin Intel.”

A seasoned industry figure, Tan has served on the boards of 14 semiconductor companies. Prior to joining Intel, he was CEO of software firm Cadence and served on Intel’s board from 2022 to 2024. He’s also the founder of Walden Catalyst Ventures, an investment firm focused on the semiconductor space and has backed numerous successful startups.

Tan was a Ph.D. candidate studying nuclear engineering at MIT. Before completing his doctoral degree, he switched course to pursue an MBA at the University of San Francisco and start his own ventures.

Now, his biggest challenge will be restoring Intel’s standing in an industry where Nvidia, by market cap, has become 24 times larger. Nvidia also leads the sector in revenue per employee—a marker of both talent and efficiency—while Intel ranks eighth.

But Intel’s core problem may not be innovation—the hard part—but deployment. “The tragedy of Intel’s treasures lies in their delayed or deferred deployment. They optimize for minimizing quarterly losses. Many innovations have been sitting on shelf,” wrote former Intel executive Raja Koduri on X in February.

Though Tan didn’t address deployment speed directly—an area that could help Intel iterate more quickly based on customer feedback—he did commit to strengthening the company’s foundry business. This refers to Intel’s chip-manufacturing capabilities, which allow it to tailor semiconductors to specific client needs.

“Under my leadership, Intel will be an engineering-focused company,” Tan promised. Revitalizing Intel’s foundry operations—long a point of criticism, including from Apple CEO Tim Cook—will be essential to enabling faster deployment, customization, and responsiveness to customers.

To underscore his commitment, Tan has proposed spinning off Intel’s “non-core businesses,” though he hasn’t specified which ones, signaling a sharper focus on what must become the company’s strengths.

Intel’s historic success helped put the “Silicon” in Silicon Valley. It was once the backbone of the American tech hardware industry. While its legacy is secure, it now falls to Tan to determine whether that story continues.

Once worth $6 billion, with shares trading north of $300 a piece, California-based genetic testing company 23andMe declared bankruptcy on Monday (March 23) after losing 99.8 percent of its market value. 23andMe analyzed at-home saliva tests to provide ancestral history for a customer—more specifically, it did this for 15 million customers. It also sold anonymized data about those customers to companies like the pharmaceutical giant GSK. There are now 15 million customers whose data is at risk as 23andMe heads to bankruptcy court.

Founded by Anne Wojcicki, Linda Avey and Paul Cusenza in 2006, 23andMe company received $3.9 million a year later from Google, which was co-founded by Wojcicki’s then-husband, Sergey Brin. A graduate of Yale, Wojcicki worked as a healthcare analyst on Wall Street for four years before moving into healthcare research. Her older sister was Susan Wojcicki, who passed away in 2024 after a little over a decade as CEO of YouTube.

In 2017, 23andMe raised $250 million at a $1.75 billion valuation. In 2018, the company won Time Magazine’s “Invention of the Year” award for its direct-to-customer business model. Another major success came later that year, when 23andMe partnered with GlaxoSmithKline, granting the pharmaceutical giant access to genetic data from 5 million customers for drug development. GlaxoSmithKline initially invested $300 million, extending the collaboration in January 2022 with an additional $50 million. The company went public via a SPAC in 2021, which allows companies to circumvent some financial disclosures and file a traditional prospectus, soon reaching its peak valuation of $6 billion. Wojcicki owned around 49 percent of the company’s voting stock.

23andMe remained popular after going public, but the company struggled to find recurring customers. By design, the at-home test was a product that no consumer should need to purchase more than once. Ancestry testing is a one-and-done experience. The limited revenue model and rising customer acquisition costs challenged the company’s long-term profitability prospects, and 23andMe never returned to its 2021 valuation of $6 billion. In October 2023, the company was hacked, exposing around seven million people’s information and data. Last September, all independent members of the board of directors resigned after Wojcicki made numerous unsuccessful attempts to take the company private. Soon after, in November 2024, 23andMe laid off 40 percent of its staff—around 200 people—to reduce costs by $35 million. In the first nine months of the company’s current fiscal year, revenue declined 7 percent and posted losses of $174 million.

A month before 23andMe’s bankruptcy, Wojcicki continued to make numerous fully-financed offers to take the company private, though the board rejected all. Some reports show Wojcicki’s bid was as high as $42 million, almost triple the company’s current market cap of around $14 million (as of March 26).

After the bankruptcy announcement, Wojcicki said she would persist in privately owning the company. “I have resigned as C.E.O. of the company so I can be in the best position to pursue the company as an independent bidder,” Wojcicki posted. Now, 23andMe awaits court approval to sell its assets under Chapter 11 and will seek qualified buyers over 45 days. The company’s bankruptcy filing suggests it has between $100 million and $500 million in assets and liabilities each.

California Attorney General Rob Bonta urged customers to remove their genetic data from 23andMe, as it will likely be sold to the highest bidder. 23andMe stated its data protection policies will remain unchanged during the sale, and Wojcicki emphasized her commitment to protecting customers’ private data.

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Canada’s new prime minister, Mark Carney, has promised to take a hard line against the U.S., pushing back on tariff and sovereignty threats from the Trump administration while reining in government spending at home. But his fight with Washington may collide with economic reality: tariffs could tip Canada into recession, requiring more government spending, not less.

Carney, sworn into office on Friday (March 14) after replacing incumbent Justin Trudeau in Liberal Party elections, is an expert in managing economic crises. He previously led the Bank of Canada during the 2008 Financial Crisis and the Bank of England during Brexit from 2016 to 2020. Winning 85.9 percent of Liberal Party members’ votes, he promised that Trump’s trade war would not threaten Canada’s sovereignty. “In trade, as in hockey, Canada will win,” he said in his victory speech earlier this month.

Earlier this month, the U.S. imposed a 25 percent blanket tariff on most imports from Canada. (The tariffs were later lifted for automobiles and goods protected by the 2018 US-Mexico-Canada trade deal). Oxford Economics and Canada’s Desjardins Group, the largest federation of credit unions in North America, expect that the 25 percent tariff on Canadian goods could push the country into recession. The Canadian government has since retaliated with a 25 percent tariff on $21 billion worth of U.S. steel and aluminum exports.

The U.S. tariffs could be the final blow to Canada’s already ailing economy. Stephen Johnston, director of Omnigence Asset Management in Calgary—a major Canadian asset management group—argues the country is already in stagflation: the economy grew only 1.2 percent and 1.3 percent in 2023 and 2024, respectively. Even before the tariff threats, Canada’s labor productivity was slowing, housing prices were skyrocketing, and per-capita real GDP declined in 2024. The OECD expects Canada to experience the lowest economic growth between now and 2060 among its 38 member nations.

The economic picture being painted is at odds with Carney’s proposal to cap the federal workforce expansion, limit spending, balance the budget within three years, and run only a “small deficit.” While likely helpful to the Canadian government’s long-term balance sheet, modern Keynesian economics suggests a weakening economy requires more investment and stimulus to jumpstart growth. These are the same fiscal policies major economies used to end recessions during the 2008 Financial Crisis and the Covid-19 pandemic—tools Carney knows well, having expanded the money supply and increased liquidity as Governor of the Bank of Canada in 2008.

Carney’s economic austerity promises are an attempt to strike a balance between the Liberal Party’s tradition of generous spending and the growing threat posed by the Conservative Party’s platform of fiscal cuts. Carney is set to face off with Opposition Leader Pierre Poilievre in national elections this October, which could end his premiership shortly after it began.

Carney has agreed to meet with President Trump “under a position where there is respect for Canadian sovereignty,” he said in a statement on March 12. Negotiations will be a crucial step toward ending the ongoing trade war between two historically allied countries, but they mark only the beginning of a long road to recovery for Canada.