Markets Shake Off Tariff Fears. But This Fed Risk Has No Swift Fix.

Taylor Swift performs during the “Taylor Swift | The Eras Tour” on Aug. 15, 2024 in London, England. (Kate Green/Getty Images)

As Taylor Swift fans celebrate news of her forthcoming album, Wall Street is also in a party mood.

The S&P 500 and Nasdaq hit record highs yet again Tuesday after monthly inflation data signaled that sweeping tariffs aren’t causing a big spike in consumer prices, boosting hopes that the Federal Reserve is about to start cutting interest rates.

The working thesis is that the soft July jobs report means the central bank will prioritize supporting the labor market by lowering borrowing costs, even if the trade-off is inflation running a little hotter than its target. Treasury Secretary Scott Bessent even called for a half-point cut, which would be quite the change of pace given the Fed has yet to lower rates at all this year.

Still, both investors and the Trump administration should know all too well by now that Fed Chair Jerome Powell may not yet be singing from the same hymn sheet.

Powell said last month that the central bank would probably have eased monetary policy already if it were not for tariffs, and the market could be in for a rude awakening if he sticks to that argument at next week’s Jackson Hole Economic Symposium.

It’s been anything but a love story between Trump and Powell. With the Street now pricing in three straight rate cuts, the Fed chair needs to come round to the president’s way of thinking, otherwise the stock market will face a major disappointment.

Swift’s mega-tours have lifted countries’ GDP in the past. Investors will be hoping the Fed is about to give the U.S. economy an even bigger boost by cutting rates, but it wouldn’t take much of a pushback for Powell to become the anti-hero.

—George Glover

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Perplexity Bids for Google Chrome Amid Wait for Judge’s Decision

Artificial-intelligence start-up Perplexity AI has offered Alphabet $34.5 billion to buy Google’s Chrome browser. Perplexity CEO Aravind Srinivas wrote in a letter to Alphabet CEO Sundar Pichai that the proposal would satisfy an antitrust remedy in the event a federal judge rules Google must sell the browser.

• Google has been waiting for U.S. District Judge Amit Mehta’s decision on the remedies it must make to restore competition after ruling the company ran a monopoly in search. The Justice Department urged the judge this spring to force Google to sell its Chrome web browser.
• In the letter outlining its $34.5 billion proposal on Tuesday, Perplexity called itself a “capable, independent operator focused on continuity, openness, and consumer protection,” and said it was committed to “maintaining, supporting, and promoting Chromium” as the open-source project that underlies many web browsers.
• Although the proposed purchase amount is larger than Perplexity’s own $18 billion valuation, the company told The Wall Street Journal that several investors including large venture-capital funds have agreed to back the transaction in full.
• Google hasn’t indicated it’s interested in a sale of Chrome. Lee-Anne Mulholland, Google’s vice president of regulatory affairs, told Barron’s last November that being forced to spin off Chrome or Android would “harm consumers, developers and American technological leadership.”

What’s Next: Perplexity offered to invest $3 billion over 24 months for reliability, performance, security, and customer support, and to maintain “uninterrupted availability and support for existing customers for at least 100 months post-close.” Srinivas asked Pichai for a response by Friday, Aug. 15.

— Janet H. Cho

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Inflation Has Been Tame, Though Tariff Effects Are Visible

Inflation is not surging out of control, with the headline number holding steady 2.7% in July from a year ago. That should provide some flexibility for Federal Reserve officials to cut interest rates in September if the job market continues to weaken. Core inflation rose 3.1% on an annual basis in July, up from June’s 2.9% pace.

• Nationwide economist Oren Klachkin said inflation remains “well-behaved,” as price growth largely met expectations. While the effect of higher import tariffs are visible in the July consumer price index data, the rate at which they are flowing through to consumers remains manageable, at least for now.
• Fitch Ratings chief economist Brian Coulton notes the annual rate of core goods inflation was 1.2% in July, a notable rebound considering it had been negative as recently as March. Used car prices, in particular, rose 0.5% in July after several months of decline, gaining nearly 5% annually.
• Prices for some products that had risen sharply in May and June, including major appliances, fell in seasonally adjusted terms last month. Specifically, washer and dryer prices fell by 2.2%. Prices for personal care products were flat on the month. Apparel prices also rose by a more muted 0.1%.
• Services inflation is also helping keep inflation above the Fed’s 2% target. After a couple of months of decent readings, the gain in services prices accelerated again to 0.4% in July from June, for an annual growth rate of 3.6%. Services inflation excluding shelter rose 4% in July from a year ago.

What’s Next: Still, while today’s data are certainly not a deterrent to rate cuts, there is another inflation report and another report on nonfarm employment before the next Fed policy meeting on Sept. 16-17. For more on Tuesday’s CPI report, read here.

—Megan Leonhardt

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Oklo Among Nuclear Startups Racing to Build New Reactors

Nuclear start-up Oklo is among the 11 companies chosen by the Energy Department for a test reactor program that is striving to have at least three advanced nuclear reactors running at America’s national laboratories by July 2026. Achieving that deadline would be a year ahead of Oklo’s internal targets.

• Nuclear is a red-hot sector, no pun intended, but still largely untested. Nuclear reactors ordinarily take about a decade to get licensed and built, but President Donald Trump wants to speed up the process with a streamlined regulatory review process. Trump also says current reactor radiation emissions standards are unrealistic.
• While some nuclear experts have raised concerns about the risks of bypassing traditional regulatory procedures and safeguards, there is a growing industry of newer start-ups aiming to build nuclear reactors using designs they say are faster and cheaper to build than the 1950s vintage sites.
• Oklo went public last year, while another firm on the Energy Department’s list, Terrestrial Energy, is expecting to go public later this year after merging with a blank-check company. Others chosen include Aalo Atomics, Antares Nuclear, Atomic Alchemy, Deep Fission, Last Energy, Natura Resources, Radiant Energy, and Valar Atomics.
• Oklo’s second quarter included a narrower net loss than a year ago. Its second-quarter cash burn was in line with expectations, and it reiterated that a goal of commercial operations between late 2027 and early 2028. It awaits approval for its first plant at Idaho National Laboratory.

What’s Next: Wedbush analysts led by Dan Ives said Oklo stands to benefit from the administration’s support of nuclear energy and its “key allies in the White House,” including former Oklo board member and current Energy Secretary Chris Wright.

— Avi Salzman, Mackenzie Tatananni, and Janet H. Cho

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CoinDesk Owner Bullish Starts Trading Today

Bullish, the company that owns the crypto news and data site CoinDesk, is set to start trading shares today with a higher valuation than anticipated. It’s a sign of optimism for digital assets such as Bitcoin and Ethereum.

• Bullish said late Tuesday that it will offer 30 million shares priced at $37 each under the ticker BLSH. As late as Monday, it said it expected to price the shares at between $32 and $33. They will start trading on the New York Stock Exchange on Wednesday.
• The company features a well-known list of executives and backers. Its chief executive is Tom Farley, who was formerly in charge of the NYSE. Peter Thiel, a Silicon Valley venture capitalist, was an early investor, and Galaxy Digital, another crypto firm, has a stake.
• Bullish has also said that iShares owner BlackRock and Cathie Wood’s ARK Investment Management expressed interest in buying shares at the IPO.
• At 150.7 million shares outstanding, a $37 IPO price would give the company a market value of $5.6 billion —roughly the size of ride-share firm Lyft or car rental company Avis.

What’s Next: Bitcoin and other cryptos are trading close to record highs, and if they continue to rise it should bode well for Bullish. The company holds about $2 billion worth of crypto on its balance sheet.

— Paul R. La Monica and Brian Swint

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Taylor Swift’s Latest Album Is Music to These Companies’ Ears

Many companies are poised to benefit from new music by Taylor Swift now that she has posted news of her 12th studio album “The Life of a Showgirl.” For starters, Universal Music Group, the record company behind Swift, will get a share of the streaming and publishing revenue, Morningstar’s Matthew Dolgin says.

• Universal Music Group, which recently filed for a U.S. listing, could be limited in how much it makes since Swift owns her master recordings. Wolfe Research analysts led by Peter Supino estimate it collects between $40 million to $80 million annually from Swift’s recorded music sales.
• Swift’s “The Eras Tour” became the highest-grossing tour of all time, racking up a reported $2 billion in global ticket sales. The tour also likely added $10 billion to the U.S. economy, according to the U.S. Travel Association, including ticket sales, food, merchandising, travel, and other spending.
• Another potential tour could bolster various revenue streams through Live Nation Entertainment’s Ticketmaster, VIP packages and online fees. While the Eras Tour may have uplifted the U.S. economy, Wolfe’s Supino said the global event contributed less than 1% of Live Nation’s total 2023 revenue.
• Swift has roughly 84 million listeners on Spotify Technology, the media platform where she has surpassed 100 billion streams. Spotify reported in December that Swift’s catalog, including her most recent album, “The Tortured Poets Department,” generated over 26 billion streams in 2024.

What’s Next: Even for Swifties who have cut back on discretionary spending, expect to see an uptick in purchases of Swift merchandise and recordings, says American University economics department chair Kara Reynolds. The vinyl, cassette, and CD with a poster for the new album are priced between $13 and $30.

— Mariapaula Gonzalez

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Dear Quentin,

I read your advice about the mother-in-law’s overspending habits. You gave excellent advice regarding cognitive tests, guardianship, conservatorship, other financial supervision and freezing her credit. I especially agree with your advice to stop the $300 monthly supplements.

We seniors are pressured and scammed into buying a lot of things we don’t need, and supplements fall in line with colon cleanses and fat flushes. Too much of a supposed good thing is a bad thing, especially when it can cause organ damage and failure.

The mother-in-law from your letter should thank her lucky stars that she has investment income, free housing and children helping supplement her Social Security. Where I must lovingly chide you is your statement that she “could survive on $1,000 a month.”

You didn’t mention utilities, health and life insurance, home/renters insurance, home, yard, home and auto repairs, termite and pest protection, security, HOA fees, medical co-pays and deductibles, dental and vision care, housekeeping, taxes, clothing, orthopedic shoes or debt.

Then there are costs of entertainment. Healthy food isn’t cheap, nor are household supplies, delivery fees, store memberships to get delivery, prescriptions, pet care, personal products and hair care and beauty products so we aren’t scared to death looking in the mirror.

I live on roughly what this mother-in-law gets in Social Security ($1,300 a month), without investment income and family assistance. Even with no supplements, cable, streaming, internet, phone contract or gift-giving, it requires strict budgeting to stay afloat.

Getting by on $1,000 a month? Not gonna happen.

— Wish I Had Such Relatives

Read the Moneyist’s response here.

— Quentin Fottrell

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner