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‘Stagflation’ is the bogeyman hanging over this week’s Federal Reserve meeting: ‘That’s the tangled web they’re in’

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When Federal Reserve officials last met in late January, things looked pretty good: Hiring was solid. The economy had just grown at a solid pace in last year’s final quarter. And inflation, while stubborn, had fallen sharply from its peak more than two years ago.

What a difference seven weeks makes.

As the Fed prepares to meet Tuesday and Wednesday, the central bank and its chair, Jerome Powell, are potentially headed to a much tougher spot. Inflation improved last month but is still high and tariffs could push it higher. At the same time, ongoing tariff threats as well as sharp cuts to government spending and jobs have tanked consumer and business confidence, which could weigh on the economy and even push up unemployment.

The toxic combination of still-high inflation and a weak or stagnant economy is often referred to as “stagflation,” a term that haunts central bankers. It is what bedeviled the United States in the 1970s, when even deep recessions didn’t kill inflation.

Stagflation, should it emerge, is hard for the Fed because typically policymakers would lift rates — or keep them high — to combat inflation. Yet if unemployment also rises, the Fed would usually cut rates to reduce borrowing costs and lift growth.

It’s not yet clear the economy will sink into stagflation. For now, like businesses and consumers, the Fed is grappling with a huge amount of uncertainty surrounding the economic outlook. But even a mild version — with the unemployment rising from its current low level of 4.1%, while inflation stayed stuck above the Fed’s 2% target — would pose a challenge for the central bank.

“That’s the tangled web they’re in,” said Esther George, former president of the Federal Reserve’s Kansas City branch. “You have inflation stickiness on the one hand. At the same time, you’re trying to look at what impact could this have on the job market, if growth begins to pull back. So it is a tough scenario for them for sure.”

Fed officials will almost certainly keep their key rate unchanged at their meeting this week. Once the meeting concludes Wednesday, they will release their latest quarterly economic projections, which will likely show they expect to cut their rate twice this year — the same as they projected in December.

The Fed implemented three cuts last year and then signaled at the January meeting that they were largely on pause until the economic outlook becomes clearer.

Wall Street investors expect three rate reductions this year, in June, September, and December, according to futures prices tracked by CME Fedwatch, in part because they worry an economic slowdown will force more reductions.

One development likely to unnerve Fed officials is the sharp jump in inflation expectations this month in the University of Michigan’s consumer sentiment survey. It showed the biggest increase in long-term inflation expectations since 1993.

Such expectations — which basically measure whether Americans are worried inflation will get worse — are important because they can become self-fulfilling. If businesses and consumers expect higher costs, they may take steps that push up inflation, like demanding higher wages, which in turn can force companies to raise prices to offset higher labor costs.

Some economists caution that the University of Michigan’s survey is preliminary and for now based on only about 400 responses. (The final version to be released later this month typically includes about 800.) And financial market measures of inflation expectations, based on bond prices, have actually declined in recent weeks.

The most recent inflation readings have been mixed. The consumer price index dropped last week for the first time in five months to 2.8% from 3%, an encouraging change. But the Fed’s preferred price gauge, to be released later this month, is likely to be unchanged.

The jump in inflation expectations is also a problem for the Fed because officials, including Powell, have said they are willing to let inflation gradually return to their 2% target in 2027, because expectations have generally been low. If other measures show inflation worries rising, the Fed could come under more pressure to get inflation down more quickly.

“I do worry when I see consumer expectations moving in the opposite direction,” George said. “I think you just have to keep an eye on that.”

The last time President Donald Trump imposed tariffs — in 2018 and 2019 — overall inflation didn’t rise by much, in part because they weren’t nearly as broad as what he is currently proposing and some duties, such as those on steel and aluminum, were watered down with loopholes. Now that Americans have lived through a painful inflationary episode, they are likely to be more skittish about rising prices.

Powell referred such concerns in remarks earlier this month. He said tariffs could just have a one-time impact on prices without causing ongoing inflation. But that could change “if it turns into a series” of tariff hikes, he said March 7, or “if the increases are larger, that would matter.”

“What really does matter is what is happening with long-term inflation expectations,” Powell added.

A week after his comments, those expectations shot higher in the University of Michigan survey.

This story was originally featured on Fortune.com

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The dangerous side of popular sleep and anxiety drugs like Xanax and Lorazepam

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If you’ve been HBO’s new season of White Lotus, then you’ve seen Parker Posey’s character Victoria Ratliff popping a steady stream of Lorazepam while on a family vacation at a Thailand wellness resort, at one point comically declaring, “Someone stole my Lorazepam. I’m going to have to drink myself to sleep.” 

The drug, also known under the brand name Ativan, is part of a class called benzodiazepines, which also includes Xanax and Klonopin. Only available through prescription, they are used to help relieve anxiety and muscle spasms, and reduce seizures, according to the DEA. However, as seen in the show, they can lead to dependence and overuse. 

“We definitely see that a lot in real life as well,” Dr. Ian Neel, a geriatrician at UC San Diego Health, tells the New York Times about the class of drugs.

Of the over 30 million adults who reported using benzodiazepines in the last year, over 5 million misused them (described as “any way a doctor did not direct”), per 2019 data from the National Survey on Drug Use and Health

While some people may have taken a one-time Xanax to calm flight anxiety, for example, long-term use is what poses the most danger as it can lead to dependence. People can become dependent even when taking the prescribed amount, Dr. Ludmila De Faria, chair of the American Psychiatric Association’s council on women’s mental health, told the New York Times. 

Particularly important is the appeal of “benzos” to older adults: Those ages 50 to 64 are the biggest consumers of this class of drugs, according to the 2019 study, and need to use extra caution due to the drugs’ potential effects on slowing cognition.

The class of drugs slows down the nervous system and often takes an immediate effect. And while they are generally safe when taken as prescribed for a limited time, side effects include drowsiness, memory problems, and slurred speech. Overuse can cause worsened effects, including dependence, cognitive impairment, coma, and potential death, although rare. 

Neel cautioned that older adults may metabolize drugs differently, and should be aware of the potential for negative interactions with other medications and drugs they might be taking. Combining benzodiazepines with other depressants like alcohol, for example, can exacerbate feelings of sedation, as seen on White Lotus, as Posey’s character usually pops Lorazepam with a glass of wine. 

When regular users of benzodiazepines—often called benzos—try to wean off the drugs, it’s common to experience withdrawal symptoms, like sweating, headaches, and heart palpitations according to the American Addiction Centers

“Each benzodiazepine medication has a specific half-life that influences the length of time it takes for the drug to leave the bloodstream,” according to the Center. “If an individual is dependent on a benzo, once the drug is purged from the body, withdrawal may begin.” 

It’s important to talk to a medical doctor and a mental health professional if you think you’re experiencing any withdrawal symptoms or negative side effects from benzodiazepines because there are other ways to treat anxiety and sleep orders. “The first-line treatment [for anxiety] is typically antidepressants like SSRIs [antidepressants], plus psychotherapy,” Dr. David Merrill, a geriatric psychiatrist at Providence Saint John’s Health Center in Santa Monica, Calif. told Healthline.

For more on sleep, mental health, and more:

This story was originally featured on Fortune.com

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A CEO says his solar-panel company bought a new Tesla every year since 2021, but canceled his order for 15 new cars because the United States is a ‘country closing in on itself’

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Ivan Hansen, a retired Danish police officer, loaded up his basket at the supermarket, carefully checking each product to avoid buying anything made in the United States. No more Coca-Cola, no more California Zinfandel wine or almonds.

The 67-year-old said it’s the only way he knows to protest U.S. President Donald Trump’s policies. He’s furious about Trump’s threat to seize the Danish territory of Greenland, but it’s not just that. There are also the threats to take control of the Panama Canal and Gaza. And Trump’s relationship with Elon Musk, who has far-right ties and made what many interpreted as a straight-armed Nazi salute.

On his recent shopping trip, Hansen returned home with dates from Iran. It shocked him to realize that he now perceives the United States as a greater threat than Iran.

“Trump really looks like a bully who tries in every way to intimidate, threaten others to get his way,” he told The Associated Press. “I will fight against that kind of thing.”

A growing boycott movement across Europe

Hansen is just one supporter of a growing movement across Europe and Canada to boycott U.S. products. People are joining Facebook groups where they exchange ideas about how to avoid U.S. products and find alternatives. Feelings are especially strong across the Nordic region — and very possibly strongest in Denmark given Trump’s threats to seize Greenland.

Google trends showed a spike in searches for the term “Boycott USA,” and “Boycott America,” as Trump announced new tariffs, with the top regions including Denmark, Canada and France. At the same time, a global backslash is also building against Tesla as the brand becomes tied to Trump, with plunging sales in Europe and Canada. In Germany, police were investigating after four Teslas were set on fire Friday.

Elsebeth Pedersen, who lives in Faaborg on the Danish island of Funen, just bought a car and made a point of not even looking at U.S.-made options.

“Before Elon Musk started to act like a maniac a Tesla could have been an option. And maybe a Ford,” she said.

French entrepreneur Romain Roy said his solar panel firm has bought a new Tesla fleet each year since 2021 but canceled its order for another 15 to take a stand against Musk’s and Trump’s policies.

Describing the United States as “a country closing in on itself,” he cited Trump’s withdrawal from the Paris climate accord and Musk’s arm gestures. He said he was instead buying European models, even though it would cost an additional 150,000 euros ($164,000).

“Individual consumers, society, our countries, Europe must react,” he told broadcaster Sud Radio.

Responding to consumer demand, Denmark’s largest supermarket chain, the Salling Group, created a star-shaped label this month to mark European-made goods sold in its stores. CEO Anders Hagh said it’s not a boycott, but a response to consumers demanding a way to easily avoid American products.

“Our stores will continue to have brands on the shelves from all over the world, and it will always be up to customers to choose. The new label is only an additional service for customers who want to buy goods with European labels,” he said in a LinkedIn post.

‘I have never seen Danes so upset’

For Bo Albertus, “when Trump went on television and said he would by political force or military force take a piece of the Danish kingdom, it was just too much for me.”

The 57-year-old said he felt powerless and had to do something. He has given up Pepsi, Colgate toothpaste, Heinz ketchup and California wine, and replaced them with European products.

He is now an administrator of the Danish Facebook page “Boykot varer fra USA” (Boycott goods from the U.S.), which has swelled to over 80,000 members.

“Drink more champagne,” one user posted after Trump threatened 200% tariffs on EU wine and Champagne.

Albertus, a school principal, told the AP he really misses the strong taste of Colgate. But he’s been pleasantly surprised at finding a cola replacement that is half the price of Pepsi.

Trump’s policies have “brought the Danish Viking blood boiling,” said Jens Olsen, an electrician and carpenter. He is now considering replacing $10,000 worth of U.S.-made DeWalt power tools even though it will cost him a lot.

He has already found European replacements for an American popcorn brand and California-made Lagunitas IPA beer, which he calls “the best in the world.”

“I’ve visited the brewery several times, but now I don’t buy it anymore,” he said. He has mixed feelings because he is a dual Danish-U.S. citizen, and has spent a lot of time in the United States. But he can’t contain his anger.

“I’m 66 years old and I have never seen the Danes so upset before,” he said.

Michael Ramgil Stæhr has canceled a fall trip to the U.S. and is among many choosing to buy Danish instead of American-made, though he cannot pinpoint the exact moment he made the decision.

“Maybe it was when (Trump) announced to the world press that he intended to ‘take’ Greenland and the Panama Canal, and if necessary by military force. That and the gangster-like behavior towards the Ukrainian president in the White House,” the 53-year-old Copenhagen resident said.

“The man is deadly dangerous and is already costing lives” in the developing world and Ukraine, added Stæhr, who works helping disabled war veterans, many of whom got injured serving alongside U.S. troops in the Balkans, Iraq and Afghanistan. He himself served in Bosnia.

Rising anger in France, too

Edouard Roussez, a farmer from northern France, launched an online group, “Boycott USA, Buy French and European!” that in just two weeks has attracted over 20,000 members on Facebook.

Roussez believes a boycott of U.S. companies is a good way to express opposition to Trump’s policies, especially “the commercial and ideological war” he believes Trump is waging against Europe.

“First of all, these are the companies that financed Donald Trump’s campaign,” he said on state-owned LCP television channel. “I’m thinking of Airbnb, I’m thinking of Uber, I’m thinking of Tesla of course.”

The irony of it all? The group is on Facebook. Roussez said only the American online social media platform gave him the reach he needed. But he’s working to migrate the group to other platforms with no U.S. funding or capital.

As for any impact on U.S. export profits or policymaking, that’s unlikely, said Olof Johansson Stenman, a professor of economics at the University of Gothenburg.

The boycott could have a psychological effect on Americans who see the scale of anger, but “some may also say, ‘We don’t like these Europeans anyway,’” Stenman said.

Some choices are harder than others

Simon Madsen, 54, who lives in the Danish city of Horsens with his wife and 13-year-old twins, says the family has given up Pringles, Oreos and Pepsi Max. Not so hard, really.

But now they’re discussing doing without Netflix, and that is a step too far for the kids.

He also wonders whether he should keep buying Danish-made Anthon Berg chocolate marzipan bars, which are made with American almonds.

It’s important, he said, for people to use the power of the purse to pressure companies to change.

“It’s the only weapon we’ve got,” he said.

This story was originally featured on Fortune.com

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Critical minerals processing will be the equivalent of 19th-century oil refineries—at a Rockefeller moment

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In the 21st century, the most valuable assets aren’t oil wells, factories, data centers, or even AI large language models. The industries of the future require critical minerals. As the world seeks to generate massive amounts of energy, the real money isn’t in mining lithium, nickel, or rare earths—it’s in controlling how they move, process, and scale. A new industrial empire is being built, and just like John D. Rockefeller’s pipelines in the 19th century, the infrastructure behind critical minerals will be an incredible wealth generator.

While most companies race to secure mineral deposits—be they in Greenland, Ukraine, the Democratic Republic of Congo, or Uzbekistan—the smartest players see a different opportunity: controlling the entire supply chain. The real bottleneck isn’t finding the necessary and rare minerals—it’s refining, processing, and transporting them. China recognized this early. Though it holds only 36% of the world’s rare earth reserves, it controls over 85% of global refining capacity. That control isn’t accidental. It’s an infrastructure play—one that has made China a dominant force in electric vehicle batteries, among many other things.    

The next Rockefeller won’t be a miner; they’ll be a processing systems builder. Consider:

  • Processing facilities: The U.S., EU, and allies have massive deposits of lithium, nickel, and rare earths—but lack the infrastructure to refine them. New processing hubs will be the equivalent of 19th-century oil refineries.
  • Supply chain control: Just as Standard Oil dominated through pipelines, the companies that master logistics—raw material transport, battery recycling, and AI-driven resource allocation—will control pricing and profits.
  • Waste-to-wealth model: Much like Rockefeller turned petroleum byproducts into valuable products, the future’s biggest opportunities lie in recovering and repurposing “waste”—from extracting minerals from mine tailings to scaling battery recycling.

The fragmented nature of today’s mineral market mirrors oil in the 1860s. Mineral prices are volatile, companies operate in silos and are in distress due to lack of processing options outside China, and inefficiencies abound. But soon, the industry will consolidate. The ones who build infrastructure—rather than simply dig—will acquire competitors, dictate pricing, and create empires. China has already been flexing its monopolistic muscle in mineral supply chains to threaten U.S. investments.

Supply chain control

When governments realize that chasing basic sourcing of critical minerals does not automatically yield national mineral security, demand for localized processing and supply chain control will explode. The result? A private sector wealth creation event that could rival the rise of Standard Oil. The next Standard Oil won’t be an oil company—it’ll be one that controls the arteries of the clean energy economy. 

Infrastructure plays generate immense wealth by controlling the essential systems that enable industries to function and scale.

Consider today’s tech giants, which create immense wealth via:

1. Control over distribution and logistics: Amazon’s fulfillment and logistics network is comparable to Rockefeller’s pipelines, which controlled how oil moved. Amazon controls how many companies reach customers, making it a backbone of global e-commerce, with nearly two million small businesses using its platform. Over 60% of Amazon’s sales come from third-party sellers. 

2. Owning the “toll roads” of industry: Cloud-computing providers (Microsoft Azure, Google Cloud, AWS) power the internet economy, collecting fees from companies that rely on their infrastructure. Similarly, Standard Oil didn’t just refine oil—it owned the infrastructure that transported and distributed it, ensuring everyone paid a fee.

3. Investing in adjacent industries: Tesla not only sells cars but also profits from carbon credits, energy storage, and software subscriptions. Rockefeller found value in byproducts such as tar (asphalt), petroleum jelly (Vaseline), and paraffin (candle wax).

4. Scale and network effects: Google controls much of the internet’s infrastructure via search, advertising, Android, and YouTube, ensuring that businesses rely on its ecosystem. Standard Oil built a massive refining and transportation network, making it nearly impossible for competitors to operate efficiently without using its services.  

5. Ruthless competition on cost: Walmart and Amazon undercut competitors with ultra-low prices, driving rivals out of business before expanding dominance. Rockefeller showed competitors his books, proving he could outlast them financially, then acquired them at discounted prices.

6. Regulatory resilience through complex structuring: If governments move to break up Big Tech companies (e.g., Meta, Google, and Amazon), investors in these firms can still benefit from their individual growth trajectories. Even after Standard Oil was broken into 34 companies, Rockefeller’s wealth multiplied because he retained ownership in each one.

Just as Rockefeller became the richest man of his era by controlling oil’s movement, today’s wealthiest individuals and companies control the infrastructure of AI, cloud computing, e-commerce, and financial systems.

The upshot? The biggest fortunes are made not by chasing commodities, but by building the indispensable infrastructure that industries rely on. The forthcoming revolutions in AI and robotics might commoditize labor, but those who control the compute infrastructure (Nvidia, TSMC, OpenAI, etc.) will profit most. And they, in turn, will ultimately rely on ancient inputs from the earth. As such, the processing infrastructure of critical minerals represents a new frontier of significant wealth creation.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

This story was originally featured on Fortune.com

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