In Houston, a look at local disaster response
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and have a chance to walk away with a $75 gift card. The U.S. and China appear back on track toward a trade truce.

I'm David Brancaccio in Los Angeles. U.S. and China negotiators have a framework to get their trade relationship to a healthier spot. President Trump said today the U.S. will have 55 percent tariffs on China goods. China, he says, will go with 10 percent on the U.S. Also, according to the president, China will keep rare earth minerals flowing this way and the U.S. will let students from China study here. Jeffrey Cleveland is chief economist at Payton & Riegel here in Los Angeles. Morning.

Good morning, David. First of all, through online postings, the president of the United States says there is a done deal. This is his wording for the U.S.-China trade talks. But then he says it's subject to approval by him and President Xi of China, so perhaps not fully a done deal. How would you expect this to percolate out into financial markets?

Well, I think the fear for this year, the main fear was that tariffs would induce a recession. And so if we are inching closer to a trade deal, I think that will be good for financial markets. I think equities will enjoy that. And you should also see that reflected in bond yields as well. But it means potential for better growth and avoiding a recession, at least in 2025.

All right. Another key piece of news that came in this morning is consumer inflation for May. And with that May data, we can now tell you that prices at the consumer level, the consumer price index, went up just 2.4 percent in the year through May.

Yeah, I think this is great news for consumers, great news for central bankers as well. We see a softness in the May Consumer Price Index data. We saw soft readings on goods prices, so vehicle prices and apparel, and also in, we would call it non-housing services, so most of what you spend your money on, Dave.

David, services prices. Not that I've seen your budget, but I can just guess from the average consumer, most of what they spend their money on are services. And so that softened. And we like to look at the core CPI, so excludes food and energy, and that was up just 0.1% for the month of May. So that's a soft reading. I have to imagine, you know, stepping back here, if we didn't have the tariff threat, it might be possible that the Fed would cut interest rates, David, given the softness in the inflation data.

and this, I would say, slowly softening labor market that we've seen in recent months. But let's not get ahead of ourselves. We're still waiting for the full effects of tariffs to percolate into prices. So clearly, today's news is we're not seeing that yet. But it's not just U.S.-China tariffs. There are many other countries affected by the new tariff regime, and that could boost prices. So I'm not expecting the Fed to lower any rates anytime soon.

I think it's probably prudent for policymakers to wait for a few more months of data to see if the disinflation trend continues before taking any action on interest rates. So that sets up an interesting fall, our second half of the year, David. All right. Well, watch for that. Jeffrey Cleveland, chief economist at Payden & Riegel, the investment firm. He's based in Los Angeles. Thank you very much. Have a good week.

Not a hurricane season that starts in about two and a half weeks. Last year, hurricanes caused $124 billion in economic damage using federal numbers. This year, the Trump administration is making cuts to the Federal Emergency Management Agency. Marketplace's Amy Scott reports from Houston on some communities trying to plan local disaster responses. Doris Brown used to park her car in the garage attached to her small cream-colored house in northeast Houston.

But these days, there's no room. The place is chock full of emergency supplies, neatly organized and labeled on shelves. We have menstrual products, medical supplies. Solar batteries and panels, fire extinguisher. She's got tools, hard hats, electric heaters and sleeping bags, boxes of military-style meals ready to eat. And food's pretty good because we tested it. Especially the dessert back there. Ha ha ha.

So pretty much everything you could ever want. Yeah, we try. We try. There's even an inflatable kayak in case of flooding. Brown is co-director of West Street Recovery, a disaster relief organization that works in historically neglected communities. Now 75, she started her activism as a teenager in the civil rights movement.

Brown says she decided to turn her home into a community hub after winter storm Yuri knocked out the power for millions of Texans in 2021. I almost froze to death here. In this house? Mm-hmm. Yeah, in this house.

And that's when West Street came up with the idea of a hub house right in your neighborhood. Now she has solar panels on the roof and a whole house battery to keep the lights on when the grid fails. Neighbors can come take shelter from the elements and charge up their phones. She also keeps a roster of folks to check on who are homebound or may need supplies delivered.

We are kind of like boots on the ground. After a disaster, we are the first ones to hit the ground running. She says her hub house was put to use after a powerful derecho last May, then Hurricane Beryl just weeks later. We was dispensing batteries and

food and water and ice and stuff. Brown estimates it costs between $15,000 and $30,000 to set up a hub house, funded by donations and grants. There are now eight of them around Houston, with plans to expand by a few each year. I think eventually I would just like to see all neighborhoods getting a hub house ready because it's no longer if, it's just when now. When the next storm is going to hit.

In Houston, I'm Amy Scott for Marketplace. For a lot more on strategies to adapt to climate change, listen to our podcast, How We Survive, which Amy hosts, free from podcast apps.

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An update now on the Trump administration halting Biden-era programs that funded green jobs around the country, including in rural places. KUNC's Rae Solomon reports. The story of the solar industry in 2025 can be told as a tale of two rooftops.

Roof number one is here at the headquarters of Specialty Products, a global auto parts manufacturer in rural Longmont, Colorado, where Mina Cox is chief operating officer. See, the whole roof is covered with the solar arrays. We're talking row upon row upon row of solar panels. The company built it last year, and a grant from the USDA covered 40% of the half-million-dollar price tag. We wouldn't have done it without the grant. It just was not financially feasible.

The project was so successful that late last year Cox applied for another grant for an even bigger solar array on the second rooftop in this story, rooftop number two. It's a few miles up the road at the company's manufacturing plant where mills, laser cutters and welders turn blocks of steel and aluminum into suspension parts and oil pumps. We thought, oh, this would be great for manufacturing. These are all very large machines cutting metal.

And they use a lot of energy to do that. The panels were supposed to be funded by Biden-era solar incentives. University of Colorado Law School professor Chris Winter says the new Trump administration has a different approach. It's almost like a 180-degree flip from where we were with the prior administration. Since taking office, President Trump has sown chaos for rural renewables.

Funding for those IRA green energy grants were frozen, then unfrozen, with the USDA encouraging recipients to bring their projects in line with Trump's energy priorities.

So is the solar industry. The solar industry is in a very strong hold pattern. People aren't investing. They're not hiring. That's Mike Kruger of the Colorado Solar and Storage Association. They're generally just holding onto their cash in the hopes that we get more certainty and less chaos. ♪

Which was exactly the thought process for Mina Cox, who was hoping to build that second solar array on roof number two at her company's manufacturing plant. This facility is 40,000 square feet. The grant money seems to be flowing again, but Cox says she's not interested anymore. The uncertainty made her so wary she withdrew her application. Feels like a lot of rugs are being pulled out of small businesses and we don't want to be participating in a risk like that.

So, at least for now, our roof number two remains there. In Longmont, Colorado, I'm Rae Solomon for Marketplace. And in Los Angeles, I'm David Brancaccio. You're listening to the Marketplace Morning Report from APM, American Public Media.

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