Dangerous legal game

A federal judge ruled the Trump administration has failed to fully comply with a court order to unfreeze $3 trillion appropriated by Congress, one of many judicial directives in dozens of lawsuits over President Donald Trump’s flurry of executive orders. The unprecedented order in question, suspending the bulk of government expenditures, is widely considered by constitutional law scholars to be an unlawful power grab by the 78-year-old Republican. The “broad, categorical and sweeping” freeze is likely unconstitutional and is irreparably harming “a vast portion of this country,” Chief Judge John J. McConnell Jr. in Rhode Island said in his ruling. Vice President JD Vance and Elon Musk decried the decision, with the latter floating fanciful proposals to restrict judicial powers in retaliation.

Historically, the ruling is grave in nature as it is potentially the first tremor in something much bigger. Noah Feldman writes in Bloomberg Opinion that “it’s neither surprising nor especially worrisome” that Musk is attacking the courts—since “he doesn’t know anything about law or the Constitution and seems to view both as minor irritants.” What is of concern is the effort by Vance, a law school graduate, to undermine the fundamental constitutional principle that the executive branch must comply with a federal court order. Vance didn’t cross the line by directly calling for the administration to defy a judicial order and it would be a mistake to declare a constitutional crisis before one exists. But “what Vance is doing is more subtly pernicious,” Feldman says—and a dangerous legal game. —David E. Rovella

What You Need to Know Today

Trump Monday afternoon said he was moving forward with his latest threatened round of tariffs. Those will likely figure in Federal Reserve Chair Jerome Powell’s coming week, as he faces a tough set of hearings on Capitol Hill with both Democrats and Republicans aiming to prod him on Trump’s policies and the effect they may have on the economy. Powell’s appearances for his semiannual testimony come as Trump’s spray of orders on trade, taxation, immigration and regulation have thrown the US economic outlook into doubt, complicating the Fed’s effort to complete its soft landing. Of note is that Fed Vice Chair of Supervision Michael Barr said last month he would step down from his position as the Fed’s top banking cop, paving the way for Trump to appoint his own regulator from among the six other governors.

OpenAI Chief Executive Officer Sam Altman rejected a reported $97.4 billion bid by a group of investors led by Elon Musk for the maker of ChatGPT. Altman posted on Musk’s social-media platform: “No thank you but we will buy twitter for $9.74 billion if you want.” Elsewhere in Silicon Valley, Meta began notifying staff of their firings, starting a mass termination previously announced by Chief Executive Officer Mark Zuckerberg. He had told employees the company would slash 5% of them—as many as 3,600 people. Mass firings have been a regular feature of Meta in recent years: the company dismissed thousands of employees in 2022 and 2023. It says it’s terminating poor performers now to replace them with new workers who can help it keep up in the artificial intelligence race. The fired Meta workers were notified by email.

TD Bank expects to raise about $14 billion through the sale of its entire stake in Charles Schwab as part of a corporate overhaul in the wake of its US money-laundering settlement. Toronto-Dominion will sell 184.7 million shares of Schwab’s common stock—representing 10.1% economic ownership—teeing up the biggest secondary share offering this year. Schwab has agreed to buy back $1.5 billion of its shares from TD, conditional on the completion of the offering.

The world may have already missed its chance to limit global warming to 1.5C. The Paris Agreement was inked in 2015, with 196 countries agreeing to rein in greenhouse gas emissions to keep the global average temperature increase to “well below” 2C and ideally cap it at 1.5C compared to pre-industrial times. New analyses show the world will surpass the latter. In 2024, global temperatures reached 1.5C for the entire year, the first time it’s happened in recorded history. At the same time, more countries including the US are seeking to cast aside efforts to limit global warming and burn even more fossil fuel amid intensifying catastrophes from flooding to hurricanes to wildfires. The findings are part of a growing body of research warning the world that its climate targets are out of reach and that heating is accelerating. In fact, this January was the hottest on record.

On a cul-de-sac in Los Angeles’ Pacific Palisades, what was once a four-bedroom wood-and-stucco house is now a pile of rubble except for two chimneys and a few brick columns. The property went on the market 10 days after flames ripped through the community last month, with an asking price of $999,000. More than five dozen offers later, it’s now in escrow for “a good chunk more” than $1 million. The demand for the site, which local real estate watchers say is one of the first to sell after last month’s Palisades Fire, is an early indicator of the interest in properties that were devastated by the LA-area blazes. Even as the community reels from the inferno—and fire remains an ever-present risk—it’s a prime area that, until recently, was considered a coastal paradise.

McDonald’s said low-income consumers in the US are still under pressure despite sinking inflation and strong economic numbers. Across the industry, purchases from low-income customers were down substantially in the fourth quarter, CEO Chris Kempczinski said on a call with analysts following the company’s earnings release. McDonald’s expects the first quarter to be the “low point” this year as the chain emerges from an E. coli outbreak that scared customers. It’s also bracing for a tough consumer-spending backdrop around the world. In the US, McDonald’s launched a new value menu in January in hopes of bringing price-conscious diners in.

Marriages in China plunged by one fifth to their lowest level on record, a setback to efforts by the government to reverse a demographic crisis. The number of marriage registrations fell to 6.1 million after a post-pandemic increase to nearly 7.7 million in 2023. The tally for last year marks the fewest marriages since public records began in 1986 and is less than half the peak reached in 2013. The failure to encourage more people to tie the knot in the country of 1.4 billion people represents a challenge for a government struggling to arrest a sharp drop in births, not to mention middling economic growth and rising pension costs.

Hyatt Hotels struck a deal to purchase Playa Hotels & Resorts for about $2.6 billion, expanding its reach into the all-inclusive resort market in countries including the Dominican Republic and Jamaica. Hyatt will pay $13.50 per share, the lodging company said Monday. Hyatt already owned 9.4% of Playa’s outstanding shares. The deal expands Hyatt’s portfolio of all-inclusive resorts, a part of the lodging market Hyatt has targeted with the 2021 acquisition of Apple Leisure Group and a subsequent joint venture with Grupo Piñero. Hyatt began investing in Playa in 2013. On Monday, Hyatt shares closed down $1.63 to $162.39. Overall, stocks kicked off the week with gains, rebounding after a slide driven by concerns over inflation and Trump’s tariffs. The dollar strengthened and gold hit a record high. Here’s your markets wrap.

What You’ll Need to Know Tomorrow

For Your Commute

Portugal is speeding up processing times for golden visa applications after long delays began to tarnish the image of one of Europe’s most popular residency-by-investment programs. Portugal’s Agency for Integration, Migration and Asylum has informed potential investors that it will replace its paper-based application system with a digital one, according to a copy of the plan seen by Bloomberg News. There are currently between 45,000 and 50,000 golden visa applications awaiting review, and candidates will now able to migrate their applications to the online system.

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