Trump led stagflation?

President Donald Trump’s repeatedly delayed tariffs against major trading partners are prompting some economists to see a growing risk of a slowdown even as the cost of living continues to rise. Trump roiled into financial markets this week when he first imposed heavy tariffs on Canada, Mexico, and China, then delayed the full brunt of those tariffs from taking effect until April 2. Some economists see a growing possibility of a swift recession combined with high inflation should Trump fully bring the tariff hammer down. In the meantime, the uncertainty about future trade policy has its own drag on the economy. Tariffs could slow down economic growth while raising the cost of living at a time when the economy was already showing some signs of fatigue. Some experts see a growing risk of stagflations — stagnant economic growth combined with high inflation.

(Adapted from “Trump’s Tariff Flip-Flops Revive ‘Stagflation’ Fears,” by Diccon Hyatt, published on March 06, 2025, by Investopedia)

El Salvador’s crypto experiment

In 2021 El Salvador became the first country to make bitcoin legal tender, alongside the dollar. Nayib Bukele, the president who enjoys stratospheric approval ratings, vowed to raise billions via tokenised blockchain bonds. The country has, for years, been teetering on the brink of default. The warning signs were familiar: high debt and interest payments, exacerbated by a wide fiscal deficit, low dollar reserves, anaemic investment and GDP growth. negotiations with the IMF over a bail-out were deadlocked. The fund has now agreed to a $1.4bn loan. But in order to obtain the money, El Salvador is having to scale back its crypto project. Mr Bukele is just the latest crypto-utopian to see his wild ideas dissolve on contact with reality but bitcoin’s demotion may be more of a blessing than a concession.

(Adapted from “El Salvador’s Wild Crypto Experiment Ends In Failure,” by The Economist, published on March 2, 2025)

Pledging to buy less

Instagram, TikTok and other social-media sites are usually overwhelmed by people showing off what they bought. This year, people are pivoting to something else: displaying how they’re buying nothing. The “no buy 2025” trend encourages people to purchase as little new stuff as possible. Some people make lists of specific items they won’t purchase, while others vow not to buy any nonessentials. While it’s occurring on social media, it has very real-life reasons for catching fire. There have been two years of higher prices and rising levels of debt for households. There was also a shorter holiday season that felt rushed, where many Americans on the lower income end cut back aggressively. Instead of needing to have the latest and greatest viral products, people are finding it’s better to focus on what they already own.

(Adapted from “The Americans Pledging to Buy Less — or Even Nothing,” by Ann-Marie Alcántara, published on January 27, 2025, by the Wall Street Journal)

Materials of the future

Scientists looking to remove carbon dioxide from the air cleanly and cheaply have long been interested in metal-organic frameworks — gigantic, sponge-like molecules that can be precisely engineered to capture the gas and then release it on command. Such frameworks come in a dizzying array of structures, each with its own distinct properties. Sorting through these options to select the best one is almost impossible for a human chemist. It is, however, a perfect task for an AI model. A cluster of companies is attempting to build such models, with the aim of creating new materials. If successful, this could produce better batteries, cleaner bioplastics and more. The process will not be easy but there is still reason for cautious optimism.

(Adapted from “AI Models Are Dreaming Up The Materials Of The Future,” by The Economist, published on March 5, 2025)

Published in Dawn, The Business and Finance Weekly, March 10th, 2025