World Bank Says U.S. Economic Growth to Halve This Year
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The World Bank predicts U.S. economic growth this year will be half of what it was last year as a result of President Trump's tariff policy. 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.

Plus, members of Congress and their families made hundreds of stock trades as U.S. tariffs were being rolled out.

And President Trump warns protesters in other cities as Marines arrive in an on-edge Los Angeles. It's Tuesday, June 10th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

The U.S. economy might grow half as much as initially predicted this year, while the global economy is set to suffer a more modest but still significant slowdown. That's according to a new estimate from the World Bank out today. For more, I'm joined by WSJ Economics Editor Paul Hannan.

So in its January report, Paul, the World Bank forecast a 2.3% increase in U.S. gross domestic product. Now it's expecting just a 1.4% growth, which is a sharp decrease from the 2.8% growth in 2024. So when I think about what's different between

Now in January, of course, President Trump's tariffs are the first thing that comes to mind. Is that the main reason that the World Bank pointed to for the predicted slowdown? Very much so, yes. 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. So they've had to go back, take another look at this. And their conclusion is that, yeah, it's going to take quite a big bite out of the growth they expected to see this year in the U.S. economy and other economies around the world.

Yeah, let's talk about that a little bit. So what kind of impact could they have on global economic growth? It's going to be pretty significant. It's not going to be as big an impact as on the U.S.,

But there are significant spillovers elsewhere. The biggest is possibly Mexico. The big exception is China, which is a little bit strange because that's been the main focus of the conflict so far. But what the World Bank thinks is whatever China loses in terms of exports to the U.S.,

the government will make sure it makes up by investing more. So surprisingly, the World Bank has not cut its growth forecast for China. Could a change in the tariff rates in either direction affect this outlook?

In the World Bank's view, the US did face higher tariffs on its exports than it charged on imports. This is a point that the President has made and for the World Bank it's a legitimate source of grievance and their recommendation is that governments get around the table and basically eliminate those differences quickly in order to bring some peace to the world trade situation. The

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. And a cut in tariffs would actually have less of a positive impact. You know, the reason for that is because there would still be an awful lot of uncertainty. That was WSJ Economics Editor Paul Hannan. Thank you, Paul. Thanks.

A survey showed that Main Street businesses are feeling less worried about their prospects as hopes rise for an economic boost from President Trump's tax and spending megabill. The National Federation of Independent Business said today that its optimism index, a gauge of sentiment among small firms, rose to 98.8 in May from 95.8 a month earlier. That takes the index back above its long-term average and ends a four-month streak of worsening sentiment.

U.S.-China trade talks are in the spotlight today, with a second day of negotiations in London aimed at patching up a fraying truce between the world's two biggest economies. Commerce Secretary Howard Lutnick said the talks are going really, really well and that he hoped they would end this evening, but if needed, they would continue tomorrow.

Major U.S. indexes built on modest gains throughout the day. The Nasdaq and the S&P 500 both rose about 0.6 percent, while the Dow added a quarter of a percent.

Flare-ups continued across Los Angeles last night after a day of mostly peaceful demonstrations over immigration enforcement that saw the Trump administration take the rare step of deploying active-duty Marines to the area. Los Angeles Mayor Karen Bass called on the federal government to stop the immigration and customs enforcement raids that spurred the protests and condemned demonstrators who damaged the city.

The Los Angeles Police Department said that more than 100 people were arrested during the protests that lasted into the early hours today, nearly all for failure to disperse. Fourteen people were arrested for looting, one for assault with a deadly weapon, and one for vandalism. The police said two officers were treated at a hospital for injuries.

Speaking from the Oval Office today, President Trump defended his decision to send in Marines and thousands of National Guardsmen. And as protests have spread to other cities, he gave this warning.

And this is the first, perhaps, of many, or perhaps, you know, if we didn't attack this one very strongly, you'd have them all over the country. But I can inform the rest of the country that 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. The president also said that any protests at the military parade set to take place in Washington on Saturday, quote, will be met with very heavy force.

We're exclusively reporting that several U.S. government agencies, including the Department of Homeland Security and the Justice Department, in 2022 and 2023 tracked foreign nationals coming and going to Elon Musk's properties. That's according to people familiar with the matter. The investigation focused on people visiting Musk from countries in Eastern Europe and elsewhere who might have been trying to influence him.

The probe, which predates the current Trump administration, highlights concerns about the number of foreign nationals in Musk's orbit. Musk didn't respond to requests for comment. A White House spokeswoman referred requests for comment to DHS and the FBI, and White House officials said they had no knowledge of any previous investigation. The FBI declined to comment.

Coming up, as Trump rolled out the Liberation Day tariffs, lawmakers were trading stocks heavily. More on that after the break. This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, destination-focused dining, and cultural enrichment on board and on shore. And every Viking voyage is all-inclusive with no children and no casinos.

Discover more at viking.com. In early April, as markets tanked in response to President Trump's announcement of his Liberation Day tariffs, members of Congress and their families were busy trading stocks. A Wall Street Journal analysis found that from April 2nd, when Trump launched the sweeping tariffs, to April 8th, the day before he paused many of them, more than a dozen House lawmakers and their family members made more than 700 stock trades.

Katie Stetsch-Ferrick covers Congress for The Wall Street Journal and joins me now. Katie, what do we know about these trades? Members of Congress are required to disclose the stock trades and purchases that they make in financial disclosure statements. They file these periodically, and they also have to disclose that activity for people

trades that were made by their spouses or family members. So it really is meant to shine a light on any sort of financial benefit that a lawmaker could receive during that time. Nothing that we discovered was out of the ordinary, except for, of course, the number of trades compared to previous months. I mean, during that week, I don't know if you remember how crazy it was in the market's

I was so curious during that time what lawmakers were doing. So we finally had an opportunity. Once these disclosures came out, we were able to look back and see how lawmakers behaved during that chaotic period. And what we discovered was that there was more trading activity than there had been historically. Did any of the lawmakers explain that increased trade volume you mentioned? Most lawmakers that we talked to made these trades through financial advisors, third parties, people they don't know. And so they had provided no guidance to these lawmakers.

advisors as they were making these transactions. So only found out about them afterwards from their advisor and they'll be able to see what they either bought or sold in their portfolios later.

Katie, for a while, there's been this conversation in Congress about changing the rules for lawmakers so that they wouldn't be allowed to make trades quite like this. Where does that stand right now? That's the fascinating thing, this conversation about whether or not lawmakers should be allowed to trade individual stocks while in Congress. And this comes up periodically. It came up after the pandemic when lawmakers were getting classified briefings about what to expect with COVID-19.

There's a growing sense in Congress that lawmakers should not be allowed to trade individual stocks, or if so, have some restrictions to it, make sure that they put those stocks in a blind trust so they aren't aware of what stocks they hold while they're in Congress. Some lawmakers that I talked with

are being proactive and have already gotten ahead of potential new regulations by selling off their individual stocks and moving their investments into mutual funds. Right now, there's a handful of House lawmakers from both sides of the aisle that feel very passionate about this issue. They've gotten together recently to negotiate a compromise bill, the best of all of their ideas, to try to put forth legislation that they think could actually pass that would restrict lawmakers in some form from trading individual stocks.

That was WSJ reporter Katie Stetsch-Ferrick. Thank you so much, Katie. Thanks for having me.

Austrian authorities said that a high school shooting in Graz this morning left 10 people dead and around a dozen more injured, marking one of the worst such incidents in the country's history. The death toll from the shooting doesn't include the suspected attacker, who was found dead in what authorities described as a suicide. Officials said that the suspected attacker was a 21-year-old Austrian man from the Graz area. Police said that he had no previous criminal record and carried out the attack with two weapons that he owned legally.

He was a former student at the school, though he didn't graduate from it. Authorities are still investigating the motive.

And Americans are finally saving what they're supposed to for retirement. Well, at least close to it. A Fidelity Investments analysis of the millions of accounts it manages found that the average savings rate in 401k plans rose to a record high 14.3% of income in the first three months of this year. That's just a shade below the 15% annual savings rate financial advisors often recommend over a four-decade career.

Anne Tergesen, who covers retirement and personal finance, told our Your Money Briefing podcast why savers kept at it, despite the volatile markets earlier this year.

401k savers are just notorious for their ability to stick with the plan, whether they have a plan or not, but they stick with their investments. And in fact, they continue to contribute in general. Not many people cut back on saving. Way more people increased their savings rate than decreased it. And

Only 6% changed their investment allocation in the first three months of the year. So generally, when you say 401k savers set it and forget it or put their 401k on autopilot, the data really proves that out. People really don't make a lot of changes when the market declines. For more from Anne, listen to tomorrow's episode of Your Money Briefing.

And that's what's news for this Tuesday afternoon. Today's show was produced by Anthony Bansi and Pierre Bien-Aimé with supervising producer Michael Kosmides. I'm Alex Oseleff for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. ♪

Isn't home where we all want to be? Reba here for Realtor.com, the pro's number one most trusted app. Finding a home is like dating. You're searching for the one. With over 500,000 new listings every month, you can find the one today.

Download the Realtor.com app because you're nearly home. Make it real with Realtor.com.