Evening Briefing: Americas

US consumer confidence hit the lowest level in four years as higher prices and President Donald Trump’s escalating tariff war stoke concerns among everyday Americans about the future of the economy—and re-emerging inflation.

The Conference Board’s gauge of confidence decreased 7.2 points to 92.9 while the median estimate in a Bloomberg survey of economists called for a reading of 94. A measure of expectations for the next six months dropped nearly 10 points to 65.2, the lowest in 12 years, while a gauge of present conditions declined more modestly. The dollar, meanwhile, is headed for its worst month in over a year.

Consumer sentiment surveys from both the Conference Board and the University of Michigan have been dismal of late, as Trump’s protectionist rhetoric, global retaliation and business uncertainty fuel a resurgence in the rising prices the 78-year-old Republican promised to end. Companies have warned of rising costs and less demand, coinciding with economists’ warnings that the US could soon face the curses of stagflation and recession.

Still, as Fed Chair Jerome Powell reminded not too long ago, “hard data” suggests the economy is still on a solid footing. Unemployment remains low and manufacturing activity picked up in February. So the big question for economists and policymakers now is if the weak sentiment trend translates into observable behavior, like a marked pullback in spending. —Jordan Parker Erb

What You Need to Know Today

Congress was the setting for more explosive details Tuesday on how some of Trump’s cabinet members used a consumer messaging app to discuss war planning while mistakenly inviting a journalist to listen in. Trump (whose lawyers yesterday invoked the state secrets privilege to avoid revealing data on airlifts of Venezuelan migrants) defended National Security Adviser Mike Waltz, the former Florida Congressman who allegedly invited the editor of The Atlantic to join the unsecure chat on bombing Yemen. On Capitol Hill, the current director of the Central Intelligence Agency, John Ratcliffe, told lawmakers that using the app Signal to finalize the American attack was “permissible and lawful.”

From left, General Timothy Haugh, director of the National Security Agency, Kash Patel, director of the Federal Bureau of Investigation, Tulsi Gabbard, director of National Intelligence, John Ratcliffe, director of the Central Intelligence Agency and Lieutenant General Jeffrey Kruse, director of the Defense Intelligence Agency during a Senate Intelligence Committee hearing in Washington on Tuesday. Photographer: Kent Nishimura/Bloomberg

In addition to (as furious Democrats were quick to point out) potentially endangering the lives of American military personnel, the chat included a series of insulting remarks by Vice President JD Vance and Defense Secretary Pete Hegseth at the expense of America’s European allies. Security experts expressed horror at the inclusion of the magazine editor and the use of a consumer app, warning of dangerous ramifications for US national security, while at least one Democratic senator urged the firing of cabinet officials responsible for the unprecedented breach. Trump, himself previously indicted for the alleged mishandling of America’s most sensitive military secrets, brushed off the breach and instead attacked the magazine.

The Trump administration announced that Russia and Ukraine have agreed to a ceasefire in the Black Sea and to work out mechanisms for implementing their ban on strikes against energy infrastructure, though Russia wasn’t quite so certain. The White House said Tuesday that three days of talks in Saudi Arabia had yielded agreements “to ensure safe navigation” in the Black Sea. The sides had also agreed to prevent the use of commercial shipping for military purposes, the administration said. Ukrainian President Volodymyr Zelenskiy, whose forces had been seeing success on both the Black Sea and in destroying Russian energy infrastructure, said his forces would observe the partial ceasefire immediately. But for its part, the Kremlin confirmed the agreement on safe navigation in the Black Sea but said it was dependent on some other terms.

A patrol boat off the border base of a Ukrainian Black Sea port. Photographer: Oleksii Filippov/AFP/Getty Images

Lawsuits against the Trump administration keep coming. The two largest US teachers’ unions and a prominent civil-rights group sued the administration for moving to effectively abolish the Education Department, adding to a growing number of lawsuits against Trump’s far-reaching efforts to amass power at the expense of Congress. The National Education Association and the National Association for the Advancement of Colored People challenged the Republican’s executive order directing his education secretary to “take all necessary steps to facilitate” the department’s closing. (Only Congress, which created the agency, can eliminate it under the US Constitution’s separation of powers.) The American Federation of Teachers filed its own suit Monday. The flurry of litigation comes as the Education Department has lost nearly half of its staff since Trump took office, including in a mass firing of more than 1,300 workers this month.

KKR is on a mission to become a “mini Berkshire Hathaway.” While Warren Buffett’s $1 trillion conglomerate has drawn many imitators, KKR’s gambit is a break from its closest rivals, who’ve prioritized steady fees over direct bets. The plan is being directed by a tight-knit group of executives, including co-founders Henry Kravis and George Roberts, who oversee KKR’s balance sheet and decide which investments make the cut.

There’s a geographical divide growing in views of the stock market, with European banks more skeptical than their US rivals. Strategists at UBS and HSBC warned of further declines for US equities as economic risks mount. UBS thinks the S&P 500 Index could see another slump of 8% or so, while HSBC double-downgraded US stocks. US banks however, have recently speculated that the brunt of the recent equities selloff has likely ended, with JPMorgan strategists predicting a low risk of another momentum unwind, and Morgan Stanley seeing tailwinds for a “tradeable rally.” The division underscores the difficulty of investment forecasting at a time when markets have few answers about the long-term toll of Trump’s tariffs, both in effect and threatened, and the trajectory of economic growth and inflation are so uncertain.

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AQR Capital Management has come out swinging against the rise of options-powered funds that limit losses during stock downturns, claiming this growing form of portfolio insurance delivers lower returns—with more risk—than simpler alternatives. The quant manager’s new research argues that so-called buffer or defined-outcome strategies, which now command an estimated $50 billion in exchange-traded fund assets, are no free lunch. After dissecting the performance of 99 strategies in Morningstar data, the firm found that the majority of these allocation styles have underperformed vanilla portfolios over the past five years, including a strategy that builds the same equity exposure with a passive index, while investing the rest in Treasuries. Put simply, the money manager—which sells systematic-like products for diversification-minded investors—says there are better portfolio hedges out there.