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There’s been a huge amount of change in the last month, and from an economic standpoint, it seems to be hitting consumers slowly, but surely. Job growth is stuck, prices don’t seem to be going anywhere, and many feel they are financially worse off than a year ago.

January’s jobs data from the Labor Department, released last week, significantly missed growth projections and signified the weakest start to a year in terms of new jobs since 2016. Economists were expecting 170,000 new jobs, but the report showed the addition of just 143,000. And the expectation of job losses is growing. In the New York Fed’s Survey of Consumer Expectations, released this week, 14.2% of people feel a probability of losing their jobs in the next 12 months, up 2.3% from December.

About a third of consumers said their household financial situation is worse off than a year ago, the Survey of Consumer Expectations shows. And while this is down slightly month-over-month, only about 19% say they are doing better than a year ago—a 3% decrease from December. Over a fifth aren’t optimistic about the economy and say they will be doing worse a year from now. January’s Consumer Confidence Index, reported two weeks ago, showed a 5.4-point decline from December.

The data shows some optimism. Labor Department data showed record-high average hourly wages of $35.87, as well as an unemployment rate of 4%, down from 4.1% in December. And 36.6% feel their household finances will be better a year from now, according to the Survey of Consumer Expectations. However, there’s lots of room for improvement. Two-thirds of Americans feel that President Donald Trump administration’s policy focus so far isn’t doing enough to lower prices, according to a CBS News/YouGov poll last week. The next round of consumer price index numbers come out this week, which will show just how much prices are changing—though the consumer expectations survey shows that Americans anticipate price increases for food, gas, rent and medical care.

CFOs are increasingly having issues with making projections since so many companies rely on imports, and so many different tariff threats are being quickly proposed, rescinded and taking effect. I talked to Bob Stark, chief enablement officer of cash management software platform Kyriba, about how CFOs can plan in today’s circumstances. An excerpt from our conversation is later in this newsletter.

TARIFFS

President Donald Trump signed another round of tariffs this week: 25% on all steel and aluminum imports. “This is a big deal, the beginning of making America rich again,” Trump said as he signed the tariff orders in the Oval Office, CBS News reported. This is a familiar policy to Trump, who assessed tariffs on steel and aluminum in his first term to bolster domestic industry. Those tariffs—25% on steel imports and 10% on aluminum imports—had several exemptions, and ended up bringing the biggest benefit to steel companies, according to a 2018 analysis from the Peterson Institute for International Economics.

Allies from the EU and Australia spoke out about the planned tariffs, which are reported to go into effect next month, saying that they will harm U.S. consumers and long-established partnerships. The U.S. imports about a quarter of all of the steel it uses, and about half of the aluminum, Reuters reports. Most of the steel the U.S. imports comes from Canada, Brazil and Mexico, while the lion’s share of aluminum imports come from Canada.

Several analysts have said these new tariffs will have limited benefit to the U.S.—likely just for the steel companies—and will not likely create jobs. They are also likely to raise prices for most things made from metal. Even the United Steelworkers International Union feels the tariff proposal goes too far, and wrote the U.S. needs to take a more measured approach, distinguishing trusted trade partners.

The move caused significant shifts in the stock market, boosting prices of domestic metals companies, including Alcoa and U.S. Steel. It also boosted gold prices to a record high of $2,938 per troy ounce, as investors search for stability.

This isn’t the only move on tariffs in the last week. Trump announced during a Friday meeting with Japanese Prime Minister Shigeru Ishiba that he would announce reciprocal tariffs this week—tariffs equal to what other countries impose on U.S. goods. There’s no word yet on how those might work.

POLICY + REGULATIONS

Last Thursday, the Senate confirmed Russell Vought as the head of the Office of Management and Budget with a vote along party lines. Vought, founder of the prominent right-wing Center for Renewing America and key adviser to the Heritage Foundation’s controversial Project 2025, was considered one of Trump’s more controversial nominees because of his viewpoint of expansive executive branch control on spending. One of his first big moves is essentially halting all work of the Consumer Finance Protection Bureau, taking its website offline and telling workers not come in and stop work activities.

The CFPB was created in 2011 following the Great Recession and financial crisis. It’s an agency that protects consumers from unfair banking practices, but it also has deep-pocketed enemies. Elon Musk, who has been working with his Department of Government Efficiency task force to mercilessly cut perceived wasteful spending, has railed against CFPB because “there are too many duplicative regulatory agencies.” He said this in November, shortly after the agency announced more oversight of big tech companies and others offering digital funds transfers and payment wallet apps. Meta founder and CEO and billionaire Marc Andreessen also have spoken out against the agency, which has threatened action against tech companies’ use of financial data.

ARTIFICIAL INTELLIGENCE

AI evangelists say the technology can do a lot for companies, but to continue to grow—both revenues for companies and capabilities for users—some infrastructure investments are needed. Big companies are announcing bigger AI data center projects, with bigger budgets and footprints. Forbes’ Christopher Helman runs down many of these plans, which include not only huge facilities like Meta’s $10 billion planned Sucré data center in Louisiana—covering 4 million square feet of floor space on 2,250 acres—but enough infrastructure to power it all—$3.2 billion worth for Meta, coming from twin high-efficiency natural gas turbines. In all, Meta plans to spend $60 to $65 billion on these data centers in the next year.

Meta’s not alone in these investments. Sundar Pichai, CEO of Google parent Alphabet, announced on last week’s earnings call that the next year will see about $75 billion in capital expenditures for technical infrastructure. CFO Anat Ashkenazi said that in the last quarter Google hit capacity issues with its cloud and services business, which constrained its growth. Microsoft is planning to invest $80 billion in data centers. And through a partnership announced from the White House between SoftBank, Oracle and OpenAI called “Stargate,” SoftBank will invest $500 billion in U.S. data centers during the next four years.

OFF THE LEDGER

CFOs And Tariffs: How To Forecast Accurately In Chaotic Times

Economic predictions were challenging for CFOs before Trump’s second presidency began, but announcements of potential tariffs on different countries and industries, and along a variety of timelines, add a lot more uncertainty to the future. I talked to Bob Stark, chief enablement officer at cash management software platform Kyriba about what CFOs are going through and what they can do to prepare for the short- and long-term future.

This conversation has been edited for length, clarity and continuity. A longer version is available here.

Tariffs were also a feature of President Trump’s first term. How similar is what’s happening right now to then?

Stark: You look at what was announced around steel and aluminum, and that feels very similar to what we saw in the previous term. That said, I think the differences—and our clients had the same reaction: the blanket tariffs, the punitive tariffs, if you tariff us, then we’ll tariff you back and it’s sort of back and forth—feel a little bit more significant than what we had experienced previously. It certainly feels like an acceleration.

CFOs and finance teams are definitely looking at that as a lot of different potential scenarios that you have to prepare for. It’s not as simple as: This industry is affected [with a] 25% hit, so if you’re a Canadian steel exporter, you have this problem—which is fairly predictable. You can figure what 25% looks like.

Same with importers on the U.S. side. [They’re] just trying to understand what does our cost look like? They can map out demand, but it’s the back and forth and the uncertainty around that.

It’s difficult to predict exactly when impacts will be felt, which is a big challenge for CFOs. Many of them are looking to provide updates to guidance quarterly. In this quarter, do we have a cashflow impact that we need to control? Do we have a liquidity challenge where we need to make some plans? Do we need to provide different or maybe more expansive hedging of FX [foreign currency exchange] because we recognize that it’s these short and sharp movements that can have a significant impact in the balance sheet and income statement reporting at the end of the quarter.

There’s a lot. It’s the uncertainty of what is the actual impact. There’s so many more scenarios you have to play out in different ways that feel different than what we saw several years back when we first saw this idea of tariffs being proposed and implemented.

This time around, it feels to me like some of the tariffs that are being threatened and announced are more unexpected. Is that your impression?

Absolutely. It feels to a corporate CFO that there’s a daily news cycle that you have to invest more time in following. You have to then build that into your analysis and reporting. If you’re doing something as simple as: What is the impact of cashflow if this blanket tariff goes in. What’s the difference? It’s being delayed by 30 days. What does that mean?

There’s a lot of uncertainty and unpredictability around that. That’s the biggest challenge for CFOs. It’s like playing that hand game with your kids. You put one down, then there’s another, and then there’s another, and then there’s another. And then suddenly you think, ‘Wow, where did this go?’

That’s the part that’s really difficult to predict and build into an analysis. When the CEO is calling you because they just saw this on CNBC, and they’re asking the question: What’s the impact on our cash flow? Do we need to change our guidance? You have to juggle not just one or two different possibilities, but [there’s] probably three or four different scenarios you need to model against the same data, and then you have to be in a position to answer with precision on demand. And, ‘I’ll get back to you tomorrow’ is not an acceptable response. It’s ‘I’ll tell you right now, if these tariffs go through, this is what the impact is. If they’re delayed out 30 days, if they’re delayed out six months…’ Those are the scenarios that you have to be able to report to the board with confidence so that everyone’s prepared.

How do you think a company can make its way through the next four years?

There’s three things that CFOs can do, aside from watching all the news and being able to utilize AI to summarize the things that they can’t watch live. Once they’re armed with that insight and understanding of sentiment, they’re in a position to do three things.

Number one: FX. Those sharp, short-term movements can be the difference between hitting and missing guidance. Every CFO has to be able to quantify the impact of currency on the balance sheet, income statement and cash flow. If they’re not in a position to do that, then it erodes confidence a little bit. No one wants choppiness. They want certainty, and they want at least three months—ideally more—in advance. If you can eradicate the impact of FX, or mute it significantly, you’re in a better position than many of your peers.

Number two: forecasting and planning. Every time there’s impactful news, CFOs need to answer: What would this mean to our cash and liquidity in the future? Finance leaders, they must have precise answers. They have to have them at the ready. They have to be available for multiple scenarios so that hypothetically speaking, they can answer a question like this: Our cash flow decreases by 30% if this tariff actually happens in the next 20 days. You need to be able to answer the question with that level of precision. That CEO and the board, they’re not waiting an hour. They’re probably not waiting five minutes either. They expect data and insights right now.

The third part: Getting control over the cash lifecycle. CFOs need to be able to pull multiple levers to maintain control of their cash, especially in response to customers wanting to bring forward orders to get ahead of tariffs. That’s a perfect example of being able to have control, making sure that they can provide the structure, the systems financing to allow changes in the supply chain to occur. Also [to be able to provide control] in response to potential reshoring or recomposition of supply chains. Some of that is a little bit more longer term. That might be later in 2025 or into 2026. We recognize we just can’t compose our supply chain this way. We need to reshore this part of it. We need to eliminate this country out of our supply chain. It just doesn’t work in terms of the cost structure. Whatever that scenario looks like for them, the CFO needs to be able to put in the structure.

It’s very tactical. Everything from bank accounts to cash management structures, the ability to sweep the and pool cash and mobilize it wherever it needs to be, to not only invest, but also repatriate cash so you can meet those cashflow objectives of the organization. There’s a lot of complexity there. Nevermind working with supply chains, working with customers to be able to pull the lever of: We’re going to pay you earlier, but it’s going to come at a cost, and as a result, we need to be able to do that. You want to get paid earlier, Mr. and Mrs. Supplier, we’ll do that, but here’s the program to do it. Same thing with accelerating receipt of cash. If you need to accelerate collections, you need a structure with that. It’s not a program that just happens like that. It’s a year in the making to put that structure in with your banks and with your finance and providers.

FACTS + COMMENTS

Billionaire Bill Ackman’s Pershing Square Capital Management disclosed a major stake in ride hailing company Uber on Friday, boosting the company’s stock.

$2.3 billion: Value of Pershing’s stake in the company, which is 30.3 million shares

17%+: Increase in Uber’s share price over the last five trading days

‘One of the best managed and highest quality businesses in the world’: What Ackman wrote about Uber on X

STRATEGIES + ADVICE

Billionaire Fernando De Leon has an unusual backstory and advice to build a business that will grow. Here are seven of his tips.

Work is important, but stressful. Here are five ways you can rest and recharge without compromising your drive and ambition.

VIDEO

QUIZ

President Donald Trump made an announcement about currency this week. What was it?

A. Pennies will no longer be minted because they are wasteful

B. Harriet Tubman will not be appearing on future $20 bills

C. The U.S. is returning to the gold standard

D. $1 coins will replace bills in three years

See if you got it right here.