Trump to Unveil Reciprocal Tariffs at 1 P.M. ET, Hold Press Conference

Rollins, RFK Jr. expected to get Senate approval today | Egg prices | House budget

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February 13, 2025 08:31 AM

Updates: Policy/News/Markets, Feb. 13, 2025

— Trump said he plans to unveil reciprocal tariffs today at 1 p.m. ET, but gave no other details. “Today is the big one: reciprocal tariffs,” Trump wrote on his social media platform. “Very simply it’s if they charge us, we charge them,” he said on Air Force On. Trump says he will hold a press conference on reciprocal tariffs. Indications are that autos and pharmaceuticals will be exempt from the tariffs, something that House Speaker Mike Johnson (R-La.) alluded to in comments to reporters Wednesday.

— U.S. wholesale prices rise in January, adding inflation pressure. U.S. wholesale prices increased in January due to higher food and energy costs, signaling limited progress on inflation despite tariffs imposed by the Trump administration. The Producer Price Index (PPI) for final demand rose 0.4% from the previous month, following an upwardly revised 0.5% gain in December, according to the Bureau of Labor Statistics. Economists had forecast a smaller 0.3% increase. Year-over-year, the PPI climbed 3.5%. Excluding food and energy, the PPI rose 0.3% in January and 3.6% compared with a year earlier.

The report follows Wednesday’s Consumer Price Index data showing underlying inflation at its highest level since March, reducing the likelihood of multiple Federal Reserve rate cuts in 2025. Some economists expect no cuts at all, citing inflation risks linked to higher tariffs on imported goods.

Fed Chair Jerome Powell emphasized that inflation expectations remain anchored, giving the Fed flexibility in future rate decisions. However, President Trump’s tariff policies continue to introduce uncertainty to the economic outlook.

Stock futures rose, while Treasury yields and the dollar fell after the PPI report.

— The House goes out of session after today until Feb. 24. The makes today’s House Budget panel vote on a budget resolution a major one. Link to our special report on the topic.

— White House officials are eyeing cuts to agency budgets of between 30% and 40% on average across the government, centered on significant staff reductions, the Washington Post reported, citing sources. The newspaper added that billionaire Elon Musk’s team has initiated sweeping layoffs of federal employees.

— Senate to vote today on nominations of RFK Jr. and Brooke Rollins. The Senate Wednesday advanced Robert F. Kennedy Jr.'s nomination for Secretary of Health and Human Services via a 53-47 vote along party lines, setting the stage for a likely confirmation vote today. This procedural vote, known as invoking closure, ends debate on the nomination and paves the way for a final confirmation vote, which is expected to take place on Feb. 13. Given the current party-line support, it appears likely that Kennedy will be confirmed as the next Secretary of Health and Human Services.

Despite concerns about his past vaccine skepticism and shifting policy positions, Kennedy received unanimous support from Senate Republicans, including key figures like Sen. Bill Cassidy (R-La.), who highlighted commitments from the administration on public health priorities.

Kennedy’s confirmation hearings were marked by missteps on key healthcare programs, backtracking on vaccine and abortion stances, and scrutiny over his financial ties to vaccine-related litigation. Nonetheless, GOP lawmakers signaled confidence in his ability to advance the administration’s health agenda. All 13 Democrats on the Finance panel voted against advancing his nomination.

USDA Secretary nominee Brooke Rollins is also up for a likely Senate vote and will be easily approved.

Timeline: The Senate will vote on RFK Jr.’s nomination is at 10:30 a.m. ET. This vote, originally scheduled for 7 a.m. ET, got pushed back several hours via a time agreement reached on Wednesday night. As noted, in a 53-47 party-line vote, the Senate invoked cloture on Kennedy’s nomination on Wednesday. After the Kennedy confirmation vote, the Senate will vote to confirm Brooke Rollins to be USDA secretary. Rollins advanced out of the Ag Committee by a unanimous 23-0 vote earlier this month.

Later this afternoon, there will be two cloture votes on Howard Lutnick’s nomination to lead the Commerce Department and SBA nominee Kelly Loeffler. If cloture is invoked, these two nominations will be taken up by the Senate when they return on Tuesday. Meanwhile, Kash Patel, the nominee for FBI director, will have his Senate Judiciary Committee vote today. USTR nominee Jamieson Greer as noted was voted out of the Senate Finance Committee on Wednesday.

— Nestlé CEO defends packaged foods amid Kennedy’s criticism. Nestlé CEO Laurent Freixe defended packaged food, emphasizing its role in providing safe, quality nutrition and reducing food waste, in response to criticism from U.S. Health Secretary nominee Robert F. Kennedy Jr. Freixe highlighted that packaged food helps combat food insecurity and food-borne diseases. Kennedy, nominated by President Donald Trump to head the Department of Health and Human Services, has previously criticized processed food, notably calling out Kellogg’s Fruit Loops during his campaign. While Nestlé continues to monitor the situation, Freixe underscored the company’s shared commitment to promoting health and nutrition.

— Trump administration buyout accepted by 75,000 U.S. federal workers under President Donald Trump’s administration, equal to 3% of the civilian workforce, according to the U.S. Office of Personnel Management. The program is part of Trump’s strategy to downsize the 2.3-million-strong federal workforce, which he has criticized as ineffective and biased. The buyout allows employees to receive full salaries and benefits until October without working, but unions warn that continued funding is uncertain after current spending laws expire on March 14. Agencies have been directed to prepare for staff reductions of up to 70%, with several already laying off recent hires. (Federal agency heads were also told in the Tuesday order that for each person hired into their department, they must cut four workers.)

In a move to cut $1 trillion from the federal budget, Trump has tapped Elon Musk to lead the newly created Department of Government Efficiency. However, with civilian worker salaries comprising less than 5% of the total $6.75 trillion federal budget, achieving such deep cuts may prove challenging.

Of note: Unions representing federal workers had sued to stop the program, and had delayed it for six days while U.S. District Judge George O’Toole in Boston considered the issue. But the judge ruled on Wednesday that the unions did not have legal standing to bring the lawsuit and said the issue needed to be tackled in other forums before landing in court. The administration said the program is now closed to new applicants.

420? The Office of Personnel Management informed government workers that any resignations received after 7:20 p.m. Washington time yesterday would not be accepted. On the West Coast, that time was 4:20 p.m. — a number Elon Musk frequently uses in a nod to marijuana culture.

— Trump pushes for major cuts to the federal workforce. Elon Musk initiated sweeping layoffs of federal employees following an executive order signed by President Donald Trump, aiming for “large-scale reductions” in the federal workforce. This move, executed largely through Musk’s U.S. Department of Government Efficiency (DOGE), aligns with Trump’s longstanding goal to reduce the size of the federal government. However, defense and law enforcement agencies remain exempt, leaving many other departments vulnerable to cuts. Here a few highlights according to a Washington Post in depth article on the topic (link).

· Federal workforce trends: The federal government employs over 3 million workers. While hiring rose under both Trump and Biden, federal employees as a share of the overall U.S. workforce remain historically low.
· Departmental impact: Cuts will primarily affect agencies like USAID and the Small Business Administration, while the Departments of Defense, Homeland Security, and Veterans Affairs are protected.
· Probationary workers at risk: The executive order targets newer employees on probation, who face fewer job protections, impacting up to 10% of the workforce.
· Deferred resignation program: Around 75,000 federal workers accepted resignation packages offering pay through September.
· DOGE’s role: The Department of Government Efficiency leads the effort, with Musk framing the initiative as a necessary reduction of federal bureaucracy.

Upshot: While union leaders and critics warn these cuts could cripple essential government services, the Trump administration claims it is essential to streamline operations and reduce government spending, despite a full 25% reduction yielding only a 1% budget cut.

— Trump has call with Putin; says it is start of talks to end Russia/Ukraine war. President Trump said that he had “a lengthy and highly productive” call with President Vladimir Putin of Russia, which he characterized as the start of the negotiation to end the war in Ukraine. A Kremlin spokesman confirmed the call, and said Putin invited Trump to visit Moscow (Trump says he probably will meet Putin in Saudi Arabia in the not too distant future.) Trump expressed optimism, predicting a “successful conclusion” to the conflict soon.

British Defense Secretary John Healey said it was for Ukraine to decide the timing and terms of any negotiations on ending the war with Russia. “It’s the Ukrainians that are doing the fighting. It’s for them to decide when to start talking and on what terms,” Healey told Sky News.

Of note: Trump quoted Defense Secretary Pete Hegseth, who said that it’s “not practical” for Ukraine to have NATO membership, and while “some of the land will come back,” returning to the borders of 2014 is an “unrealistic objective.” Europe “must [additionally] provide the overwhelming share of future lethal and non-lethal aid to Ukraine” and any future U.S. funding would be issued with security guarantees. To accomplish that, Treasury Secretary Scott Bessent is visiting Kyiv this week to “be assured, in some form, that we are going to get this money back,” like deals that would give the U.S. access to Ukrainian rare earth minerals or inking agreements for resources like oil and gas.

Bessent said on Wednesday that a minerals deal between Kyiv and Washington would provide Ukraine with a post-war “security shield”, and President Volodymyr Zelenskyy said he hoped to reach an agreement within days.

Meanwhile, Defense Secretary Pete Hegseth signaled a shift in U.S. policy toward Ukraine, softening earlier positions. He described Ukraine’s return to its pre-2014 borders as “unrealistic” and ruled out both U.S. troop involvement and NATO membership for Ukraine as part of a potential peace settlement. Instead, Hegseth called for “robust security guarantees” backed by European and non-European forces to ensure long-term peace. The U.S. has provided $65.9 billion in military support to Ukraine since January 2022. However, Hegseth suggested the Trump administration would avoid large new arms shipments, reflecting the administration’s recalibration of U.S. priorities away from a primary focus on European security.

Keith Kellogg, Trump’s Ukraine envoy, confirmed the administration’s push for negotiations at the upcoming Munich Security Conference, emphasizing the importance of a unified message among top U.S. officials, including Secretary of State Marco Rubio and National Security Adviser Mike Waltz.

The U.S. secured the release of American schoolteacher Marc Fogel from Russian custody. Trump highlighted this development as a sign of “good will” and further progress toward a peace deal with Russia.

— China proposes Putin/Trump summit to end Russia/Ukraine war: WSJ. China has floated a proposal for a summit between Russian President Vladimir Putin and U.S. President Donald Trump to facilitate an end to the ongoing Ukraine war, the Wall Street Journal reported. Chinese officials raised the proposal with Trump’s team through intermediaries, aiming to support peace efforts following an eventual truce. The Kremlin confirmed Putin invited Trump to Moscow, with their first meeting likely to take place in Saudi Arabia. While China has long been urged by the West to use its influence with Russia, it maintains that dialogue and negotiation are the only viable paths toward resolution. No formal peace talks have taken place since the conflict’s early months nearly three years ago, and tensions remain high as both Russia and Ukraine stand firm on their conditions for peace.

Of note: European leaders scrambled on Thursday to try to get a seat at the table in Ukraine peace talks after Trump spoke directly to Putin and announced the start of negotiations.

— Senate confirms Gabbard to be director of national intelligence in a vote of 52-48, as enough Republicans coalesced behind a nominee once seen as facing one of the roughest paths to confirmation. Every Republican except Sen. Mitch McConnell (R-Ky.) voted for Gabbard.

— Inspectors general sue Trump administration over alleged unlawful firings. Eight inspectors general fired by President Trump in January filed a lawsuit alleging their termination violated federal law requiring 30-day notice and reasons provided to Congress. The lawsuit, filed in U.S. District Court, accuses the administration of illegal interference, as the inspectors general were blocked from accessing their workplaces and official systems. The plaintiffs, who include IGs from agencies such as Defense, State, and Veterans Affairs, are seeking reinstatement. The firings — part of a broader purge of 17 inspectors general — drew bipartisan concern. Sen. Chuck Grassley (R-Iowa) criticized the lack of legally required notice. The suit adds to mounting legal challenges facing Trump, including efforts to downsize the federal workforce and end birthright citizenship. Trump fired a 19th inspector general, the USAID’s watchdog, this week.

Of note: One of the IGs who is suing, Phyllis Fong, had been in her position at USDA for more than 20 years. After Fong was told she was fired, she continued to go to work, “recognizing that her termination was not effective because it failed to comply with the IG Act’s requirements,” her attorneys wrote, until her federal badge was deactivated, and her computer and phone were taken back by USDA.

— Senate panel advances Greer for U.S. Trade Representative (USTR) role. The Senate Finance Committee voted 15-12 to advance Jamieson Greer’s nomination as U.S. Trade Representative despite opposition from some Democrats concerned about his alignment with President Donald Trump’s trade policies. Greer, previously chief of staff for former U.S. Trade Representative Robert Lighthizer and currently a partner at King & Spalding, played a key role in negotiating the U.S.-Mexico-Canada Agreement (USMCA), the U.S./Japan trade deal, and the Phase 1 deal between the U.S. and China. Supporters highlighted his extensive experience and commitment to American industry advocacy.

— Trump’s inflation battle: Promises, problems, and policies. President Donald Trump’s campaign promise to lower prices on Day One has hit a wall. Inflation surged last month, with the Bureau of Labor Statistics reporting a half-percent increase driven by rising fuel and egg prices — the biggest jump since August 2023. Prices are now 3% higher than the same time last year, presenting a tough political challenge for Trump just 24 days into his new term.

Bird flu has caused a major spike in egg prices — up 15.2% in the past four weeks. This marks the largest egg price increase in a decade, driving annual prices up by 53%.

Egg prices hit record high. The latest monthly Consumer Price Index showed that the average price of a dozen Grade A eggs in the U.S. reached $4.95 in January, eclipsing the previous record of $4.82 set two years earlier and more than double the low of $2.04 in August 2023, the Associated Press reported. Relief is not expected anytime soon, as highly pathogenic avian influenza cases continue to hit layer flocks and the peak demand season around Easter is ahead.

This morning’s Producer Price Index (PPI) report, revealed significant information about egg prices:
· Record-breaking prices: The average price for a dozen large Grade A eggs in U.S. cities reached a new record high of $4.95 in January 2025.
· Monthly increase: Egg prices saw a dramatic increase of 15.2% in January compared to December 2024, marking the largest surge since June 2015.
· Year-over-year growth: The PPI for farm products, specifically jumbo eggs, showed a substantial increase of 125.1% compared to the same period last year.

Several factors are contributing to the ongoing rise in egg prices:
· Avian influenza: Continued outbreaks of bird flu are affecting hen populations and egg output.
· Supply chain issues: Major retailers like Costco and Trader Joe’s have implemented purchase limits due to shortages.
· Production decline: U.S. egg production fell by 3% in December compared to the previous year.

USDA forecasts a potential increase in egg prices of 20.3% by the end of 2025, with a possible rise as high as 45.3%. This suggests that consumers and businesses should prepare for continued price pressures in the egg market throughout the year.

Of note: Brooke Rollins, in her confirmation hearing before the Senate Ag Committee, acknowledged that addressing the avian flu outbreak will be “one of the very top priorities” in Trump’s USDA.

Possible strike at key lab threatens California’s bird flu response. Workers at the California Animal Health and Food Safety Lab at UC Davis are voting on a potential strike, sparking concerns about the state’s ability to combat the ongoing bird flu outbreak. The lab, the only facility in California equipped to handle severe avian flu cases, has been struggling with staffing shortages and strained resources. Union negotiations between the University Professional and Technical Employees and the UC system remain deadlocked.

Trump’s four-part plan to tackle inflation includes tax cuts, tariffs, boosting oil production, and slashing government spending. However, mainstream economists remain skeptical, warning that these strategies may not deliver the promised relief—or could even reignite inflation. Key obstacles include legislative gridlock on tax cuts, the limited impact of new oil drilling, and doubts about the feasibility of massive government spending cuts.

Despite some early signs of falling Treasury yields, other critical inflation-fighting measures remain unimplemented or ineffective so far. With inflation expectations rising, the political pressure on Trump to deliver results quickly is mounting.

National Economic Council Director Kevin Hassett told CNN Wednesday that Trump is already taking action on prices. For example, he claimed DOGE found $40 billion worth of spending to cut, although that amount remains hard to verify. “We’re focusing on getting spending under control and having supply-side tax cuts and regulatory policies and drilling and so on, so that there’s a lot of supply-reduced demand,” he said. “That’s how you get prices down at the more macroeconomic level.”

Hassett also noted that the administration is working on a plan to combat the avian flu that has disrupted egg supplies and driven prices higher, although he didn’t share any specifics.

— Trump and India’s Modi to hold joint press conference in Washington. President Donald Trump and Indian Prime Minister Narendra Modi will hold a joint press conference today during Modi’s visit to Washington, the White House announced. This marks a rare event for Modi, who seldom engages with the press beyond select interviews and has not held a full press conference in India since taking office in 2014. Discussions between the two leaders will focus on trade, energy, technology, and immigration. The press conference is scheduled for 5:10 p.m. ET. Modi previously participated in a joint press conference with then-President Joe Biden in 2023, where his denial of religious discrimination in India drew criticism from rights advocates. The journalist who questioned Modi at that event faced online harassment, prompting a response from the Biden administration condemning the attacks.

— Hamas signals commitment to ceasefire amid criticism of Israeli and U.S. leaders. Hamas officials emphasized their desire to maintain the Gaza ceasefire, despite criticizing what they described as “language of threats and intimidation” from Israeli Prime Minister Benjamin Netanyahu and. President Donald Trump. In a statement, Hamas reaffirmed its commitment to the agreement, including a prisoner exchange on the agreed timeline. Khalil Al-Hayya, a senior Hamas official, is in Egypt for talks with Egyptian and Qatari mediators, who are working to resolve outstanding issues. Both Netanyahu and Trump have called for an end to the ceasefire unless Hamas releases prisoners, while Hamas accuses Israel of failing to meet its obligations, particularly regarding aid delivery to Gaza.

FINANCIAL MARKETS

— Equities today: Asian and European shares were mostly up in trading overnight, with some European and Australian indexes hitting record highs. U.S. Dow opened up around 100 points. In Asia, Japan +1.3%. Hong Kong -0.2%. China -0.4%. India flat. In Europe, at midday, London -0.6%. Paris +1.6%. Frankfurt +1.8%. European shares were at a record high on Thursday, supported by strong earnings for Nestle and Siemens, amid broader market optimism over the U.S.’ plans to begin talks with Russia to end the nearly three-year-long war in Ukraine.

Equities yesterday: The Blue Chip index finished down in the wake of the stronger-than-expected reading on inflation. The Dow declined 225.09 points, 0.50%, at 44,368.56. The Nasdaq edged up 6.09 points, 0.03%, at 19,649.95. The S&P 500 lost 16.53 points, 0.27%, at 6,051.97.

— Fed rate cuts delayed as inflation progress slows. Investors are less confident about a near-term rate cut by the Federal Reserve. Following Wednesday’s CPI report, futures markets pushed expectations for a rate cut from June to September. The report showed minimal progress toward the Fed’s 2% inflation target. Fed Chair Jerome Powell told Congress that while progress has been made, “we’re not quite there yet,” emphasizing the need to maintain restrictive policy for now.

— Powell stresses patience on rate cuts amid persistent inflation concerns. Federal Reserve Chair Jerome Powell told the House Financial Services Committee that the Fed is in “no rush” to cut interest rates despite ongoing pressure from President Donald Trump. Powell emphasized that monetary policy would remain restrictive as inflation is still above the Fed’s 2% target. He cited the higher-than-expected January Consumer Price Index (CPI) reading but highlighted the importance of focusing on Personal Consumption Expenditures (PCE) inflation for a clearer picture. Powell reiterated that the Fed won’t be swayed by political influence and will avoid making decisions based on short-term data fluctuations. The Fed’s patient stance on rate cuts remains unchanged since the January FOMC meeting.

— The euro rose to a one-week high against the dollar on Thursday as optimism over prospects of a peace deal between Ukraine and Russia overshadowed a hotter-than-expected U.S. consumer prices print.

— Brazil backs off BRICS currency, focuses on cutting dollar dependence. Brazil’s BRICS presidency this year will not push for a shared currency but will focus on easing international payments and reducing reliance on the U.S. dollar in global trade, according to four government officials cited by Reuters. While Brazil’s proposed agenda could raise concerns in Washington, officials emphasized it is not directed at replacing the dollar. Instead, Brazil aims to reform BRICS financial systems, exploring blockchain technology and linking payment systems to lower transaction costs. President Donald Trump recently warned BRICS against challenging the dollar’s dominance, hinting at potential tariffs on countries that try. Despite previous advocacy from Brazilian President Luiz Inácio Lula da Silva for a BRICS currency, officials clarified that the idea has never entered technical discussions. Lula has since moderated his stance, defending BRICS nations’ right to explore alternatives without committing to a new currency. Brazil’s fast-growing instant payments system, Pix, is central to its financial innovation. Brazil also operates a Local Currency Payment System (SML), which allows transactions to be settled in local currencies rather than the dollar, but adoption has been slow due to settlement delays. The July BRICS summit will revisit these proposals, aiming to build a more connected and efficient payment network.

— Gold rose on Thursday, supported by a weaker U.S. dollar and growing worries over U.S. President Donald Trump’s tariff plans, which could heighten global trade tensions, while investors eyed another set of inflation data. Spot gold added 0.3% to $2,913.38 per ounce as of 0935 GMT, moving back towards its record peak of $2,942.70 hit on Tuesday. U.S. gold futures firmed 0.4% to $2,940.90.

— Deere’s profit dips as farmers turn to rentals amid high borrowing costs. Deere & Co reported a significant drop in first-quarter profit as farmers, pressured by weak incomes and high borrowing costs, increasingly opted to rent equipment rather than buy. Farm income fell by 23% from 2022, marking one of the sharpest declines in history, according to USDA data. The Federal Reserve’s cautious rate cuts and ongoing inflation have also led dealers to reduce inventory levels. Trade uncertainties, particularly from new tariff announcements by President Donald Trump, added further challenges for U.S. farmers. Key agricultural exports like soybeans, corn, wheat, and meat remain at risk of retaliatory tariffs from China, Canada, and Mexico.

Deere reaffirmed its full-year profit forecast of $5 billion to $5.5 billion despite a predicted 30% decline in large agricultural equipment sales in the U.S. and Canada in 2025. The company posted a net income of $869 million, or $3.19 per share, compared to $1.75 billion, or $6.23 per share, a year ago. Revenue for the quarter dropped 30% to $8.51 billion.

— Reddit shares slide on disappointing user growth. Reddit shares dropped nearly 15% in premarket trading Thursday after reporting weaker-than-expected daily active users. While fourth-quarter earnings and revenue exceeded expectations, user numbers fell short of Wall Street forecasts. CEO Steve Huffman attributed the decline to volatility caused by Google’s search algorithm changes, which he said have since stabilized.

— Nissan and Honda ended talks to merge and create a $60 billion carmaker on Thursday, pitching Nissan into deeper uncertainty and underlining the difficulties faced by many auto manufacturers as Chinese rivals disrupt the industry.

— Kraft Heinz misses estimates, projects lower 2025 profit as price hikes hit demand. Kraft Heinz forecasted 2025 profit below analysts’ expectations after price increases hurt demand for key brands like Lunchables and packaged meats. The company missed quarterly sales estimates for the fourth consecutive time, with shares falling 4% in early trading.

Rising living costs have pushed consumers toward cheaper alternatives, weakening sales of higher-margin products, including condiments and spices. North American organic net sales dropped 3.6% in the last quarter of 2024, with overall volumes down 4.1 percentage points.

In response, Kraft Heinz plans to invest in pricing adjustments for four key brands and its U.S. food-away-from-home segment. CFO Andre Maciel noted that the recovery in sales is taking longer than anticipated, requiring more price competitiveness, especially for underperforming brands like Capri Sun.

The company also faces increased marketing and technology costs to regain shelf space from private-label competitors, as well as higher manufacturing and labor expenses. For 2025, Kraft Heinz expects adjusted profit between $2.63 and $2.74 per share, well below analysts’ $3.04 forecast. Annual organic sales are projected to be flat to down 2.5%. Fourth-quarter revenue totaled $6.58 billion, missing Wall Street’s estimate of $6.66 billion.

— Nestlé reports modest sales growth, warns of lower profit margins in 2025. Nestlé reported slightly better-than-expected annual sales growth, driven by price increases, but warned of a narrower profit margin in 2025. Under new CEO Laurent Freixe, the company is aiming to restore investor confidence, focus on innovation, and grow sales volumes after years of price hikes strained its marketing budget and alienated shoppers. Despite headwinds, Nestlé maintained its target for higher organic sales in 2025. The company expects an operating profit margin of 16% or more, down from 17.2% last year, as it invests for future growth. Shares rose nearly 6% following the news, with analysts calling the results a “new beginning.” Nestlé competitors like Unilever slowed price hikes to regain market share, while Nestlé moved more cautiously. Annual organic sales rose 2.2%, with sales volumes up 0.8%, although overall sales and net profit declined slightly.

— Japan’s wholesale inflation accelerates, reinforcing BOJ rate-hike speculation. Highlights:

January wholesale prices up 4.2% year-on-year vs forecast of 4.0%
Inflation speeds up for the fifth consecutive month
Index gauging yen-based import prices up 2.3% year-on-year
Most economists predict BOJ will raise rates again in late 2025

AG MARKETS

— Ag markets today:

Corn and beans weaker, wheat firmer this morning. Grain markets held in tight price ranges overnight, with corn and soybeans trading lower and on session lows early this morning while wheat is firmer. As of 7:30 a.m. ET, corn futures were trading 2 to 3 cents lower, soybeans were around a penny lower and wheat futures were 2 to 5 cents higher. The U.S. dollar index was down around 120 points, and front-month crude oil futures were about 90 cents lower.
Wholesale beef prices continue to fall. Wholesale beef prices dropped $3.20 for Choice to $319.26 and $3.07 for Select to $309.14 on Wednesday. While spot movement improved to 176 loads, retailer demand has been seasonally weak and isn’t expected to improve much until late winter/early spring.
Bigger jump in cash hog index. The CME lean hog index is up another 89 cents to $87.08 as of Feb. 11, marking the biggest daily increase in the seasonal price rise. The index has jumped $6.65 since the seasonal low on Jan. 9.

— Ag trade: South Korea purchased 132,000 MT of corn expected to be sourced from the U.S., South America or South Africa. Algerian purchased between 360,000 and 400,000 MT of optional origin milling wheat, with much of it likely to be sourced from Romania, Bulgaria and Ukraine. Taiwan tendered to buy 102,450 MT of U.S. milling wheat. Saudi Arabia tendered to buy 595,000 MT of optional origin wheat.

— U.S. soybean, cotton sales with small beef, pork reductions to China in latest data. USDA Export Sales data for the week ended Feb. 6 included activity for China for 2024-25 of net sales of 221,982 metric tons of soybeans and 16,787 running bales of upland cotton. No sales activity was reported for wheat, corn, or sorghum for the period. For 2025, there were small sales of pork and beef, but cancellations led to net reductions of 527 metric tons of beef and 7 metric tons of pork.

— Brazil trims soybean production forecast, raises corn crop. Brazilian crop supply agency Conab trimmed its soybean production forecast by 310,000 MT to 166.01 MMT, citing “irreversible crop losses” in southern Brazil caused by a drought. That’s below forecasts from USDA and private crop watchers. Conab raised its Brazilian corn production outlook to 122.01 MMT, up 2.46 MMT from last month, after its first assessment of safrinha production. Conab expects Brazil to export 105.44 MMT of soybeans (down 30,000 MT from January) and 34 MMT of corn (unchanged) in 2024-25.

— Exchange cuts Argentine corn production forecast. The Rosario Grain Exchange cut its Argentine corn production forecast by 2 MMT to 46 MMT due to heat and moisture stress. The exchange forecasts the country’s soybean production at 47.5 MMT, around 5 MMT less than if weather conditions were favorable, and warned crop potential could decline more depending on rains over the next 10 days.

— U.S. wheat should be spared from winterkill damage. Bitter cold temperatures hit U.S. winter wheat areas overnight. World Weather Inc. says most of the wheat produced in this region should not have been vulnerable to damage from the arctic temps because of widespread snow cover. However, the forecaster noted there is still considerable debate over whether serious crop damage occurred in January when bitter cold overspread the same region with limited or no snow cover.

— Strategie Grains raises EU wheat production forecast. Strategie Grains slightly increased its wheat production forecast for the European Union to reflect improved planting conditions and a response to competitive market dynamics. The French consultancy now expects EU wheat production to reach 127.7 MMT, up 500,000 MT from its prior forecast and 14 MMT (12.3%) above last year. However, the firm noted, “The threat of yield losses persists due to excess moisture in west Europe and lack of rain in southeast Europe.”

— Indonesia to import 200,000 tons of raw sugar to stabilize prices ahead of Ramadan. Indonesia plans to import 200,000 metric tons of raw sugar to boost its government food reserve as domestic white sugar prices have risen ahead of Ramadan, the National Food Agency announced on Thursday. The country’s estimated domestic white sugar production for 2025 stands at 2.6 million tons, while demand is projected at 2.84 million tons. Existing white sugar stocks were reported at 842,000 tons in early February. National Food Agency chief Arief Prasetyo Adi emphasized that the move is not due to a production shortage but to stabilize prices, which averaged 18,365 rupiah ($1.12) per kilogram — 5% above the government’s ceiling price. The imported sugar will gradually arrive this year and be managed by state-owned food companies. With a broader goal of achieving food self-reliance by 2029, Indonesia has also set a raw sugar import quota of 3.4 million tons for industrial use in 2025.

— Agriculture markets yesterday:
• Corn: March corn rose 6 1/4 cents to $4.90 1/4, closing near the session high.
• Soy complex: March soybeans fell 15 3/4 cents to $10.27 3/4, nearer the daily low and hit a near four-week low. March soybean meal fell $2.50 to $294.10, nearer the session low and hit a two-month low. March soybean oil fell 47 points to 45.66 cents and nearer the session low.
• Wheat: March SRW wheat fell 2 3/4 cents to $5.74 1/4, while March HRW futures closed 1 1/4 cents lower at $5.91 1/2. Each closed near session lows.
• Cotton: March cotton rose 7 points to 67.47 cents and nearer the daily low.
• Cattle: Futures traded mixed Wednesday, with February live cattle sliding 52.5 cents to $199.15 and most-active April slipping 27.5 cents to $195.725. March feeder futures gained 20 cents to $264.975
• Hogs: April lean hog futures surged $1.35 to $94.325 and closed nearer session highs while nearby February futures climbed 72.5 cents to $89.45. The latter expires at noon Friday.

FARM POLICY

— Reaction of former FSA county director to DOGE involvement.

“Over my long career as an FSA County Director, I can assure you that I never looked at my role being an ‘unconstitutional branch of government’ ala Musk’s statement. FSA is nothing like that today. FSA has always been local with the county office offices administering programs to farmers directly and very efficiently. There is always room for consolidation and some staff reductions. With that said, do not destroy a very successful FSA farm program delivery system by mass job reductions at county levels. Seek out government waste in other areas. Each farm bill/farm program going forward always gets more complicated. If Musk is successful, get ready to sort out all the farm programs signups and details online or call in help line. If the current county FSA farm program delivery system is altered significantly, farmers may find themselves totally on their own figuring out farm program details and sign ups. If the tough ag economic situation continues, FSA programs and more frequent FSA farmer interaction will become vital to many farming operations.”

— Reaction to GAO report on Biden/Vilsack operation of SNAP/food stamps. The GAO report was requested by Phyllis Fong, one of the IGs who is suing the Trump administration for her dismissal (see related item above). A significant Government Accountability Office (GAO) report (link) uncovered serious issues with USDA’s management of SNAP under the previous Biden administration. The report, released Feb. 12, concluded that USDA violated federal budget statutes in its handling of SNAP funds. Link to our special report on the topic.

Reaction to the GAO report:

House Ag Committee Chairman GT Thompson (R-Pa.) said: “USDA’s reckless accounting gimmicks under Secretary Vilsack weren’t just bad bookkeeping—they were an abuse of taxpayer resources and a violation of law. Ignoring their own financial experts, Biden’s USDA chose political convenience over program integrity and the financial standing of the department, a clear pattern of operation for the prior Administration. We will not let this go unchecked — we will ensure accountability and put an end to these partisan budget games.”
The Trump administration USDA statement: “Make no mistake, Secretary Vilsack and Deputy Undersecretary Stacy Dean put politics over commonsense, ignoring scores of USDA financial analysts and policy experts. Using a memorandum from the left-leaning Center on Budget and Policy Priorities as their guide, Vilsack and Dean compromised the integrity of SNAP, the financial standing of USDA, and further eroded public trust,” said Kailee Buller, Chief of Staff of USDA. “The Trump administration will immediately correct this egregious action, making certain material weaknesses like this do not happen again.”

Of note: This controversy is part of a larger debate over SNAP management and funding:

Thrifty Food Plan re-evaluation: The Biden administration’s 2021 re-evaluation of the Thrifty Food Plan, which resulted in a 21% increase in SNAP benefits, has been a point of contention.
Current Republican proposals: Some Republicans have proposed measures to limit USDA’s power to adjust the Thrifty Food Plan and implement other changes to SNAP, potentially leading to significant spending reductions.
Ongoing scrutiny: USDA’s management of SNAP has been under increased scrutiny, with recent reports showing high improper payment rates.

ENERGY MARKETS & POLICY

— Oil prices drop 1% amid Russia/Ukraine peace talks and rising U.S. crude stocks. Oil prices fell by 1% on Thursday as news of potential peace talks between Russia and Ukraine, along with rising U.S. crude inventories, eased supply concerns. Brent crude dropped 86 cents (1.1%) to $74.32 per barrel, while U.S. West Texas Intermediate (WTI) fell 91 cents (1.3%) to $70.46. This follows a more than 2% decline on Wednesday after U.S. President Donald Trump revealed that Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy expressed interest in peace during separate calls with him. Meanwhile, higher U.S. crude stockpiles also weighed on the market, with EIA data showing a larger-than-expected inventory build.

— Russia seeks oil sanction workarounds amid rising global supply, says IEA. Highlights:

Russia’s crude production rose to 9.2 million barrels per day (bpd) in January despite new U.S. sanctions.
The IEA forecasts global oil supply to outpace demand growth in 2025, with global supply rising by 1.6 million bpd compared to 1.1 million bpd in demand growth.
China’s fuel demand may have peaked, as its conventional transport fuel consumption plateaued in 2024.
Russia could rely on smaller vessels and its “shadow fleet” to sustain oil exports.

Global oil outlook:

The IEA raised its 2025 oil demand growth forecast by 50,000 bpd, now predicting a 1.1 million bpd increase.
U.S. sanctions and Russia’s ability to adapt will determine the extent of future disruptions in Russian exports.
OPEC+ output cuts remain in place until April, while non-OPEC supply from the Americas is set to lead the global increase in production.

Brent crude briefly rallied to over $82 a barrel in January but later retreated to around $74 amid concerns over the global economy and potential trade conflicts.

— Russia’s commercial revenues from sales of crude oil and oil products in January rose by $900 million from December to $15.8 billion due to higher oil prices and stable export volumes, despite sanctions, the International Energy Agency said on Thursday.

— Oil prices Wednesday dropped over 2% amid U.S. diplomacy efforts on Russia/Ukraine war and inflation concerns. Oil prices fell sharply on Wednesday after U.S. President Donald Trump initiated diplomatic steps to address the Ukraine conflict, easing geopolitical tensions. Brent crude dropped $1.82 (2.36%) to settle at $75.18 per barrel, while WTI fell $1.95 (2.66%) to $71.37 per barrel. This pullback follows a recent three-day rally, during which Brent and WTI rose 3.6% and 3.7%, respectively.

Analysts attributed the decline to reduced risk premiums as Trump engaged with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy. Stronger-than-expected U.S. inflation data further pressured prices, dampening hopes for early Federal Reserve rate cuts. Fed Chair Jerome Powell indicated a cautious approach, with potential rate cuts pushed from September to December. Higher interest rates tend to slow economic growth and reduce oil demand.

On the supply side, U.S. crude inventories rose more than expected, while gasoline stocks unexpectedly declined. Russia may face production cuts due to U.S. sanctions and Ukrainian drone attacks. Meanwhile, OPEC maintained its global oil demand growth outlook, and the EIA raised its U.S. crude production estimate for 2025 to 13.59 million barrels per day.

In a notable policy move, President Trump appointed Kathleen Sgamma, an advocate for oil and gas development, to lead the Bureau of Land Management, signaling potential shifts toward expanded domestic energy production.

— OPEC sticks to strong oil demand forecast for 2025 amid energy transition uncertainty. OPEC reaffirmed its forecast for robust global oil demand growth in 2025, expecting a rise of 1.45 million barrels per day (bpd), followed by 1.43 million bpd in 2026, unchanged from last month. The group cited air and road travel as key drivers, dismissing concerns that potential trade tariffs could significantly impact global economic growth. While OPEC’s outlook remains at the higher end of industry forecasts, the International Energy Agency (IEA) projects lower growth, predicting demand will peak this decade due to a shift toward cleaner energy. Despite ongoing uncertainty over U.S. trade policy, OPEC+ continues to implement gradual output cuts to balance the market, with Brent crude hovering near $76 a barrel after the report’s release.

— Trump administration doubles down on “energy dominance” with key Interior appointments. The Trump administration has appointed Kathleen Sgamma, a prominent advocate for oil and gas development in Western states, to lead the Interior Department’s Bureau of Land Management (BLM), which oversees nearly 250 million acres of public land. Sgamma, president of the Western Energy Alliance, has been a vocal critic of efforts by previous administrations to prioritize conservation over energy expansion. As BLM director, Sgamma will manage federal leasing programs for oil, gas, mining, grazing, and renewable energy development. She is expected to ramp up quarterly oil and gas auctions and expand the acreage available for development, reversing Biden-era restrictions on leasing public lands. Oil production on federal land currently accounts for about 11% of U.S. output.

Additionally, the administration nominated Brian Nesvik, former director of Wyoming’s Game and Fish Department, to head the Fish and Wildlife Service. Nesvik has previously criticized the Biden administration’s refusal to delist species like the grizzly bear from the endangered species list.

Interior Secretary Doug Burgum recently rolled out new orders in line with Trump’s “energy dominance” agenda, aiming to boost domestic energy production and roll back regulations. Among the measures are efforts to revoke Biden-era Endangered Species Act rules and protections for migratory birds.

Conservation groups have strongly opposed the appointments. “Everyone who treasures the outdoors should oppose her nomination,” said Taylor McKinnon of the Center for Biological Diversity.

TRADE POLICY

— S. Korea seeks to negotiate U.S. Tariffs amid strong investment presence. South Korea’s Acting President Choi Sang-mok expressed optimism about negotiating U.S. tariffs with President Donald Trump’s administration, citing significant South Korean investments in the U.S. economy. “We have things to offer the United States, as many companies, such as those in the shipbuilding sector, are making investments,” Choi said during a parliamentary session. Over the past two years, South Korea has been the largest investor in the United States, with foreign direct investment totaling $57.54 billion in 2022 and 2023. However, investment fell by 26% in the first three quarters of 2024 compared to the previous year. The White House recently highlighted Hyundai Steel’s potential plans to build a U.S. plant while defending Trump’s 25% tariff on steel imports. Although Trump initially ruled out exemptions, Choi noted the government’s intention to consult with Washington, following similar requests from Japan and Australia. South Korea’s trade minister had earlier suggested that higher tariffs might prompt increased domestic investment in the U.S.

— Vietnam is ready to engage with the United States to discuss the new tariffs on steel imposed by Washington and to avoid risks of additional duties, a spokesperson for its foreign ministry said on Thursday.

CONGRESS

— House Republicans unveil budget resolution with spending cuts and debt limit increase. House Republicans released a budget resolution (link) to begin the reconciliation process. The resolution allocates $4.5 trillion to the House Ways and Means Committee for tax cuts, falling short of what tax writers say is needed for the president’s tax priorities. It also includes a $4 trillion debt limit increase and outlines $1.4 trillion in spending cuts over the next decade. The plan also calls for $300 billion in new spending, likely for immigration enforcement and defense. Link to our special report out Wednesday.

The House budget resolution does not provide specific details on the $230 billion in agriculture-related cuts. The resolution directs the Agriculture Committee to find $230 billion in spending reductions over 10 years. However, the exact breakdown of these cuts is not specified in the resolution itself. Key points about the proposed agriculture cuts:

The $230 billion figure is a target for the Agriculture Committee to meet through spending reductions.
While specific details are not provided, it is likely that a significant portion of these cuts would come from the Supplemental Nutrition Assistance Program (SNAP/food stamps). Republicans have stated that any SNAP-related changes would focus on reducing waste and fraud rather than cutting existing benefits for participants. Some potential areas for cuts being considered include updating work requirements and limiting future updates to the Thrifty Food Plan, which is used to calculate SNAP benefits.
The $230 billion figure is not necessarily all from SNAP.

In a statement Wednesday, House Ag Ranking Member Angie Craig (D-Minn.) said: “Taking $230 billion out of the food economy hurts the farmers who grow our food, the truckers who move it, the processors who package it and the grocery stores that sell it.”
Of note: This budget resolution is a blueprint for a later reconciliation bill, and the specific details of the cuts will need to be worked out by the Agriculture Committee and negotiated with the Senate. The final numbers and policy changes will likely differ from what is currently proposed in the resolution.

Senate’s alternative plan. The Senate Budget Committee voted along party lines Wednesday to send its budget resolution to the floor. The resolution, which was drafted by Senate Budget Committee Chair Lindsey Graham (R-S.C.), was approved on an 11-10 vote after dozens of Democratic amendments were defeated by Republicans. Defense and border security funding would be offset by unspecified spending cuts. Tax cuts are postponed for now. While saying he would prefer one bill as the House is trying to do, Graham said, “If they can’t then we need to get money into systems that are failing.” The current House version would only put $110 billion toward border and immigration policy compared with the Senate version which contains $175 billion. Senate plans are to hopefully take up the resolution in the full Senate next week. Then the differences between the two versions will be the focus… and there are big differences.

Republicans are using the process known as budget reconciliation to advance Trump’s priorities. That approach lets them push a bill through the Senate with a simple majority, avoiding the 60-vote filibuster threshold and the need for Democratic votes. Without congressional action, the 2017 tax cuts — such as lower individual tax rates and business-related tax breaks—will expire at the end of 2025.

— Senate bill seeks deadline extension for corporate ownership reporting. Sen. Tim Scott (R-S.C.) introduced legislation to extend the deadline for businesses to report beneficial ownership information to Jan. 1, 2026. The bill mirrors a House-approved measure, which passed 408-0, and addresses reporting delays caused by legal challenges. The extension applies to businesses formed or registered before Jan. 1, 2024, amending the 2020 law aimed at combating money laundering. Scott’s bill has at least 10 co-sponsors.

CHINA

— China’s central bank pledges to adjust policy to support growth. China’s central bank said it would adjust its monetary policy at the appropriate time to support the economy amid rising external headwinds. The central bank pledged to make comprehensive use of its monetary policy toolkit, including interest rates and its bank reserve requirement ratio, and “adjust the intensity and pace of policy measures based on domestic and international economic and financial conditions.” It also plans to keep liquidity ample, promote a reasonable rebound in prices and keep the yuan exchange rate basically stable at a “reasonable and balanced” level.

FOOD AID

— Trump and Musk’s target: USAID and its future at risk. President Donald Trump and his adviser Elon Musk have taken aim at the U.S. Agency for International Development (USAID), calling for a sweeping review and potential shutdown, according to a report from Bloomberg (link). Trump’s administration has paused most foreign aid (humanitarian food aid is still flowing), with Musk labeling USAID as a wasteful entity that should be dismantled. Dozens of senior officials have been placed on administrative leave, and USAID employees were locked out of their Washington headquarters.

What is USAID and its role? USAID, founded in 1961, is America’s key agency for administering humanitarian and development assistance. With a budget of about $43 billion in 2023, it operates globally, focusing on disaster relief, food security, and promoting economic development in over 130 countries. Its missions are strategic, aiming to prevent humanitarian crises from escalating into security risks for the U.S.

Why the Trump administration is critical. Trump and his allies view foreign aid as an expensive endeavor misaligned with U.S. interests. Secretary of State Marco Rubio has floated the idea of folding parts of USAID into the State Department or eliminating the agency entirely. Critics claim USAID is a “rogue” agency mismanaging funds, with Musk’s team investigating alleged misuse.

The global impact. Freezing U.S. aid could create severe humanitarian consequences, according to Doctors Without Borders, affecting millions in conflict zones and impoverished nations. With the U.S. contributing nearly 30% of global official development assistance, a reduction would create a vacuum that China could exploit, expanding its influence in the developing world.

Is a shutdown legal? While other democracies like Canada and the UK have merged their development agencies into foreign ministries, experts argue that a U.S. president cannot unilaterally shut down USAID. Congressional approval is required, and despite Republican majorities, Democrats can use the filibuster to block significant structural changes. Observers warn that sidelining USAID risks weakening U.S. soft power at a time when global competition is intensifying.

Source: Photographer: Mandel Ngan/AFP/Getty Images

WEATHER

— NWS/NOAA to rename Gulf of Mexico as Gulf of America. The National Oceanic and Atmospheric Administration and its offices, including the National Hurricane Center and National Weather Service, will be changing the name of the Gulf of Mexico to the Gulf of America. All maps, nautical charts, websites and weather products will reflect the name change that is part of an executive order US President Donald Trump signed focused on what the administration says is “restoring names that honor American greatness.” “Work is underway to update the naming convention as quickly as possible,” Susan Buchanan, a spokeswoman for the National Weather Service, said

— NWS outlook: There is a Moderate Risk of excessive rainfall over parts of Southern California on Thursday... ...There is a risk of rain/freezing rain over parts of the Pacific Northwest with 0. 10 inches of ice accumulations possible on Thursday; Rain/freezing rain over parts of the Northeast on Thursday and over parts of the Central Plains to the Ohio Valley on Friday... ...Heavy snow over the Sierra Nevada Mountains and the highest elevation across the West on Thursday; Heavy snow over parts of the Upper Midwest on Friday... ...Temperatures will be 15 to 25 degrees below average across the Upper/Middle Mississippi Valley and the Central/Southern Plains.

KEY DATES IN FEBRUARY

13: Producer Price Index-FD | USDA outlook reports for several commodities
14: Retail Sales | Valentine’s Day
16: Daytona 500
17: Presidents Day; U.S. gov’t and market holiday
21: Univ. of Michigan Consumer Sentiment | Existing Home Sales | USDA Cattle on Feed
25: Consumer Confidence | USDA Food Price Outlook
27: Durable Goods Orders | GDP | USDA Outlook Forum | Outlook for U.S. Agricultural Trade report
28: Personal Income and Outlays (PCE Price Index) | International Trade in Goods | USDA Outlook Forum concludes

LINKS