WSJ What’s News – Episode Summary

Title: World Bank Says U.S. Economic Growth to Halve This Year
Host/Author: The Wall Street Journal
Release Date: June 10, 2025

1. World Bank Revises U.S. Economic Growth Forecast

The World Bank has significantly downgraded its forecast for U.S. economic growth for 2025, projecting it to grow by only 1.4%, a sharp decline from the 2.3% estimated in January and a steep drop from the 2.8% growth rate in 2024. This revision is primarily attributed to the economic repercussions of President Trump’s tariff policies.

Alex Osola introduces the topic at [00:34], stating, “The World Bank predicts US economic growth this year will be half of what it was last year as a result of President Trump's tariff policy.”
Paul Hannon, WSJ Economics Editor, elaborates at [02:08]:

“If you go back to January, the World Bank raised its growth forecast for this year partly because what they were expecting to see this early on is the president cutting taxes, deregulating the economy. They really didn't think the tariffs were going to come that quickly.”

2. Global Economic Implications

The tariff-induced slowdown extends beyond the U.S., impacting global economies. While the U.S. faces a substantial downturn, other economies experience more modest declines. Notably, Mexico is expected to bear significant spillover effects. Surprisingly, China remains unaffected in the World Bank’s forecast due to anticipated compensatory government investments aimed at offsetting export losses to the U.S.

At [02:44], Paul Hannon discusses the global impact:

“It's going to be pretty significant. It's not going to be as big an impact as on the US but there are significant spillovers elsewhere. The biggest is possibly Mexico. The big exception is China... the government will make sure it makes up by investing more.”

3. World Bank’s Recommendations on Tariff Policies

The World Bank advises that to stabilize global trade and mitigate economic slowdowns, governments should eliminate tariff discrepancies swiftly. However, the institution warns that further increases in tariffs could severely hinder economic growth, whereas tariff reductions might not yield substantial benefits due to persistent uncertainty.

At [03:25], Paul Hannon highlights:

“The World Bank warns that a big further increase in tariffs from where they were at the end of May would slow the economy fairly significantly. A cut in tariffs would actually have less of a positive impact. The reason for that is because there would still be an awful lot of uncertainty.”

4. Main Street Optimism Amid Economic Uncertainty

Contrasting the bleak economic forecasts, small businesses exhibit increased optimism. A survey by the National Federation of Independent Business revealed that its optimism index rose to 98.8 in May from 95.8 in the previous month, surpassing the long-term average and ending a four-month decline. This uplift is partly fueled by anticipation of economic stimulus from President Trump’s tax and spending initiatives.

5. U.S.-China Trade Negotiations

U.S.-China trade talks are underway in London, aiming to repair strained relations between the world's two largest economies. Commerce Secretary Howard Lutnick expressed optimism at [04:18]:

“The talks are going to really, really well and that he hoped they would end this evening, but if needed, they would continue tomorrow.”

6. Stock Market Movements

U.S. stock markets showed resilience, with the Nasdaq and S&P 500 each rising approximately 0.6%, and the Dow Jones Industrial Average increasing by a quarter of a percent. These gains followed a period of market volatility triggered by President Trump’s tariff announcements.

7. Los Angeles Protests and Federal Response

Protests erupted in Los Angeles in response to immigration enforcement actions, leading to the deployment of active-duty Marines. The demonstrations, sparked by Immigration and Customs Enforcement raids, escalated into clashes requiring federal intervention.

Mayor Karen Bass condemned the federal raids and the actions of demonstrators who damaged the city. During the protests, over 100 people were arrested, including 14 for looting and two police officers were injured.

From the Oval Office, President Trump defended his decision to deploy Marines, stating at [06:13]:

“This is the first perhaps of many... when they do it, if they do it, they're going to be met with equal or greater force than we met right here. We did a great job.”
He further warned that protests at the upcoming military parade in Washington would be met with "very heavy force."

8. Investigation into Foreign Influence on Elon Musk

An exclusive report revealed that U.S. government agencies, including the Department of Homeland Security and the Justice Department, investigated foreign nationals' interactions with Elon Musk's properties in 2022 and 2023. The probe focused on individuals from Eastern Europe and other regions who might have attempted to influence Musk. The investigation, predating the Trump administration, underscores ongoing concerns about foreign interference, though Musk did not comment on the matter.

9. Congressional Stock Trading Amid Tariff Announcements

Following President Trump’s Liberation Day tariffs announcement in early April, an analysis by The Wall Street Journal uncovered that over a dozen House lawmakers and their family members engaged in more than 700 stock trades between April 2 and April 8. This spike coincided with significant market volatility.

Katie Stetch Farrick, covering Congress for the WSJ, explained at [08:45]:

“During that week... we discovered that there was more trading activity than there had been historically.”
Most trades were conducted through financial advisors without direct input from the lawmakers, as noted at [09:36].

The episode also delves into ongoing discussions about restricting lawmakers from trading individual stocks to prevent potential conflicts of interest. Some lawmakers are proactively moving their investments into mutual funds or blind trusts in anticipation of new regulations.

10. Tragic High School Shooting in Graz, Austria

A devastating high school shooting in Graz, Austria, resulted in 10 fatalities and approximately a dozen injuries. The suspected perpetrator, a 21-year-old local man, died by suicide at the scene. Authorities report that the attacker had no prior criminal record and legally owned the weapons used. The motive remains under investigation.

11. Record Savings Rates in 401(k) Plans

Despite market volatility earlier in the year, Americans are improving their retirement savings. Fidelity Investments reported that the average savings rate in 401(k) plans reached a record 14.3% of income in the first quarter of 2025, nearly meeting the 15% annual recommendation by financial advisors. Ann Tergeson, covering retirement and personal finance, attributes this resilience to savers' commitment to their investment plans, with only 6% altering their investment allocations during the downturn.

At [12:29], Ann Tergeson remarked:

“People really don't make a lot of changes when the market declines. The data really proves that out. People really stick with their investments and continue to contribute.”

12. Closing Remarks

The episode concludes with acknowledgments to the production team and a preview of upcoming content, including further analysis on stock trading by lawmakers. Additionally, brief advertisements from KPMG, Oracle, and Viking are interspersed but are not covered in the content summary.

For more insights and updates, tune into future episodes of WSJ What’s News.