Like parlayers seeing their team’s wide receiver on a stretcher mid-game, Americans are feeling less optimistic about their wallets. Central to their concerns is a sense that prices will rise faster as tariffs begin to materialize.

The closely-watched monthly consumer survey published yesterday by the University of Michigan shows a growing uneasiness:

• Consumer sentiment dropped to a seven-month low in early February, decreasing by almost 5% from January.
• Americans now anticipate prices will rise 4.3% in the year ahead, a jump from last month’s expectation of 3.3% to the highest expected inflation rate since fall 2023.

What’s souring the mood? It could be the timing of the poll, which happened soon after President Trump threatened to hit major US trading partners Canada and Mexico with blanket 25% tariffs. Most economists agree that would cause companies to pass down the cost of import duties to shoppers. Though the tariffs on both country’s goods were postponed by a month shortly before they were due to kick in this week, a 10% blanket tariff was imposed on China, and Trump threatened to impose import duties on EU products as well.

Consumer sentiment dropped for all the ways the survey measures perceived economic wellbeing, plunging the most for feelings about large purchases. UMich’s survey director Joanne Hsu interprets this as a sign Americans believe it’s “too late” to avoid tariffs’ impacts. Notably, the pessimistic turn happened among respondents across the political spectrum.

Companies have tariff jitters, too

Bloomberg projects that the t-word is on track to be mentioned 900 times in 2024 Q4 earnings calls for US and European public companies, compared with 367 in the preceding quarter.

And the context usually isn’t “we can’t wait for tariffs!”: Goldman Sachs projects that every 5% increase in US tariffs would shave off up to 2% from S&P 500 earnings per share, as companies contend with higher import costs.

One item that’s already pricier…is gold. Anticipation of metals tariffs got traders rushing to ship gold bars to the US and hoard them in New York vaults, creating a gold shortage in London.—SK

UK demands spy access to Apple’s encrypted user accounts. In case you needed another reason to worry about whether your iPhone is spying on you: The Washington Post reports that UK security officials have secretly ordered Apple to allow them to retrieve content from the encrypted user iCloud account of any user anywhere in the world. If Apple were to comply with the Brits’ clandestine order, issued last month, it would deal a blow to user privacy, but sources told the newspaper that the tech giant is more likely to just stop offering encrypted storage in the UK (Apple declined to comment to the Post).

Closing of China import tax loophole delayed. We can’t promise that the $5 pants you ordered on Shein won’t fall apart, but they should reach you without delays and duty-free—for now—after President Trump signed an executive order pausing his earlier order to suspend the de minimis exception, a loophole that lets low-value packages from China enter the US without inspection or import duties. Although the loophole has been around for a long time, its use exploded when Shein and Temu came on the scene. The delay is meant to give the Commerce Department time to figure out how to collect taxes on these small shipments.

Missing plane found in Alaska with no survivors. Yesterday, rescuers located the wreckage of a Cessna aircraft operated by Bering Air that vanished Thursday while carrying 10 people across Alaska’s Norton Sound amid bad weather. Authorities said all everyone aboard had died. This was the third fatal airplane incident in the US in less than two weeks, following the collision of an airplane with a helicopter in Washington DC that left 67 people dead, and a crash of a medical plane in Philadelphia that killed seven people.—AR

Pour one out for the private equity analysts that are going to have to deal with their frantic MD. President Trump indicated this week that he wants to end the so-called carried interest tax loophole, a controversial tax provision that’s helped fund managers accumulate massive wealth for over a decade.

At issue: Investors—mainly those focused on private equity, but also hedge funds and venture capitalists—get a cut of the profit from their funds, known as carried interest. For many firm partners, that makes up a large portion of their compensation, and conveniently for them, it’s taxed as capital gains (at a ~20% rate) rather than as income (taxed at 37% federally for those in the top bracket).

• Democrats and Republicans alike have criticized this structure, saying it takes away billions of dollars in tax revenue from the government and is unfair to other workers.
• But dealmakers argue that the tax setup is appropriate because they take on risk by investing their own money in deals without a guaranteed return.

It’s not a new idea. Trump tried to close the loophole during his first presidency, and both Obama and Biden initiated similar efforts to no avail. It’s unclear if it will work this time around, but it could help Trump fill a budget hole as he plans to extend other tax cuts.—CC

Kendrick Lamar is set to become the first solo rap artist to headline the Super Bowl halftime show tomorrow night. And his performance couldn’t come at a better time to attract viewers: He dominated pop culture for the last year thanks to his feud with Drake, which also helped fuel his five Grammy wins last weekend.

But the Super Bowl wasn’t always cool enough for this. In the 2010s, the NFL was fighting an image problem, especially with younger potential viewers. It was the era of people being mad at the league for either not supporting Black players or being too soft on Colin Kaepernick for kneeling during the national anthem.

At the time, mega-stars like Cardi B and Pink were turning down the opportunity to perform at the Super Bowl. And after Maroon 5’s snoozefest of a performance in 2019, the NFL decided to make some changes, inking a reported five-year, $25 million deal with Jay-Z’s entertainment company, Roc Nation, to bring in some heavy hitters:

• This will technically be Lamar’s second big game performance following his guest appearance during the show headlined by Dr. Dre, Snoop Dogg, and Mary J. Blige three years ago.
• Roc Nation also spearheaded a Latino-inspired performance by Jennifer Lopez, Shakira, and Bad Bunny in 2020, as well as Rihanna’s well-received show in 2023.

Looking ahead…if there’s not enough drama for you in the game already, you can bet on everything from Lamar’s set list to whether or not he’ll be wearing a hoodie. —MM

Despite the spectre of getting undercut by a cheap Chinese competitor, Big Tech’s biggest players made it clear this week that they intend to keep spending money on AI like they’re Carrie Bradshaw at a Manolo Blahnik sale. Microsoft, Alphabet, Amazon, and Meta—which collectively spent $246 billion on capital expenditures last year—forecasted this week that they may shell out $320+ billion this year as they build up data centers to support AI, per the Financial Times. Amazon looks to be the highest roller of the crew, with plans to spend $100 billion or more on infrastructure.

But even as the companies recommit to their vision of a future where everyone uses their AI products—and not just for cheating on term papers—investors are itching to see more cash flowing in to justify all that spending, especially after DeepSeek appeared to get similar results for much less.—AR